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Production function estimation with micro-data shows that a persistent unobserved variable varies within firm or plant … over time but resists treatment and may cause biases. This paper presents an estimation model of the firm under endogenous …-effects estimation and remedying commonly suspected biases. Whereas productivity change is measured consistently, scale economies are not …
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A detailed decomposition of the sources of the Total Factor Productivity (TFP) growth index within an output distance function framework was carried out, looking at the following components: technical change, change in technical efficiency, scale component, and violations of the profit...
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