Products and productivity

Andrew B. Bernard; Stephen J. Redding; Peter K. Schott

doi:10.1111/j.1467-9442.2009.01584.x

Products and productivity

Andrew B. Bernard, Stephen J. Redding, Peter K. Schott

Research output: Contribution to journal › Article › peer-review

25 Scopus citations

Abstract

When firms make decisions about which product to manufacture at a more disaggregated level than observed in the data, measured firm productivity reflects both characteristics of the . firm and attributes of the . products that are non-randomly chosen by the firm. This paper develops a model of industry equilibrium in which firms endogenously sort across products and characterizes the resulting bias in measured firm and aggregate productivity. Calibrating the model's parameters, we show that endogenous product selection can have quantitatively important effects on measured firm and aggregate productivity and their response to changes in parameter values.

Original language	English (US)
Pages (from-to)	681-709
Number of pages	29
Journal	Scandinavian Journal of Economics
Volume	111
Issue number	4
DOIs	https://doi.org/10.1111/j.1467-9442.2009.01584.x
State	Published - Dec 2009
Externally published	Yes

All Science Journal Classification (ASJC) codes

Economics and Econometrics

Keywords

Firm heterogeneity
Industry equilibrium
Product choice
Productivity measurement

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10.1111/j.1467-9442.2009.01584.x

Cite this

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AU - Schott, Peter K.

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KW - Industry equilibrium

KW - Product choice

KW - Productivity measurement

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Products and productivity

Abstract

All Science Journal Classification (ASJC) codes

Keywords

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