An enormous number of empirical papers have estimated technical efficiency, the distance of firms inside a frontier, following the model of Farrell (1957). We propose a theory that explains the distance these empirical papers seek to measure. The theory is based on the idea that workers can...

In this paper we explore in depth the effect of process innovations on total factor productivity growth for small and medium enterprises (SMEs), taking into account the potential endogeneity problem that may be caused by self selection into these activities. First, we analyse whether the ex-ante...

In this paper we investigate the pattern of R&D efficiency in terms of the number of product innovations achieved by firms over time. Embodied in the R&D capital stock, we distinguish among physical R&D capital and human R&D capital, and allow the latter to be subject to dynamic returns along...

In this paper, we explore in depth the effect of process innovations on total factor productivity growth for small and medium enterprises (SMEs), taking into account the potential endogeneity problem that may be caused by self-selection into these activities. First, we analyse whether the...