Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201252 
Authors: 
Year of Publication: 
2016
Series/Report no.: 
ETLA Working Papers No. 37
Publisher: 
The Research Institute of the Finnish Economy (ETLA), Helsinki
Abstract: 
Despite the fact that multiproduct firms constitute a considerable share of firms and account for an even greater share of production, virtually all production function estimates are based on the assumption that firms are single-product producers. The single-product assumption is made due to lack of data on input allocation across the various product lines multiproduct firms operate. I provide a method to estimate product-level production functions without observable input allocations. The empirical application and Monte Carlo simulations show that the single-product firm assumption leads to biased parameter and productivity estimates and overestimated productivity differences between firms.
Subjects: 
Multiproduct firm
production function
productivity
JEL: 
D24
L11
L25
Document Type: 
Working Paper

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