NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Heterogeneity in Panel Data: Are There Stable Production Functions?

Jacques Mairesse, Zvi Griliches

NBER Working Paper No. 2619 (Also Reprint No. r1598)
Issued in June 1988
NBER Program(s):   PR

We estimate separate productions functions for approximately 450 manufacturing firms each in France and the United States and for 850 manufacturing firms in Japan, covering the 13 year period 1967-1979, and focus on the wide dispersion in the estimated slope coefficients in all three countries. The main question asked Is: "Is this dispersion real?" Could it be just a reflection of sampling variability or is it an indication of real heterogeneity? We estimate the "true" dispersion using three different approaches: Maximum Likelihood, regressions of squares and cross-products of residuals, and Swamy's "residual" method, and try to interpret the somewhat different answers which emerge. In particular, we investigate the "reality" of the estimated heterogeneity by looking at its stability over time and by relating it to differences in capital shares and the industrial structure. We conclude that the observed heterogeneity is not "real." It is caused by some non-stable misspecification of our simple model, implying that we are unlikely to discern different but stable individual production relations in samples of this size which contain only a limited number of the economically relevant variables.

download in pdf format
   (480 K)

download in djvu format
   (369 K)

email paper

This paper is available as PDF (480 K) or DjVu (369 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w2619

Published:

  • Mairesse, Jacques and Zvi Griliches. "Heterogeneite et Panels: Y-A-T-I-L Des Fonctions De Production Stables?" from Melanges Economiques: Essais en L'Honneur De Edmond Malinvaud, Paris-Economica, 1988.
  • Essays in Honor of Edmond Malinvaud, Volume 3: Empirical Economics, edited by Paul Champsaur et al., pp. 192-231. Cambridge, MA: MIT Press, 1990.

Users who downloaded this paper also downloaded these:
Griliches and Mairesse w5067 Production Functions: The Search for Identification
Griliches and Mairesse w0826 Productivity and R and D at the Firm Level
Griliches and Hausman t0037 Errors in Variables in Panel Data
Griliches and Mairesse w1778 R&D and Productivity Growth: Comparing Japanese and U.S. Manufacturing Firms
Heckman w12318 Contributions of Zvi Griliches
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us