Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/70345 
Year of Publication: 
2011
Series/Report no.: 
CIBC Working Paper No. 2011-9
Publisher: 
The University of Western Ontario, CIBC Centre for Human Capital and Productivity, London (Ontario)
Abstract: 
The estimation of production functions suffers from an unresolved identification problem caused by flexible inputs, such as intermediate inputs. We develop an identification strategy for production functions based on a transformation of the firm's short-run first order condition that solves the problem for both gross output and valueadded production functions. We apply our approach to plant-level data from Colombia and Chile, and find that a gross output production function implies fundamentally different patterns of productivity heterogeneity than a value-added specification. This finding is consistent with our analysis of the bias induced by the use of value-added.
Document Type: 
Working Paper

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