Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/62996
Authors: 
Klette, Tor Jakob
Raknerud, Arvid
Year of Publication: 
2002
Series/Report no.: 
Memorandum, Department of Economics, University of Oslo 2002,30
Abstract: 
How do firms differ, and why do they di.er even within narrowly defined industries? Using evidence from six high-tech, manufacturing industries covering a 24-year period, we show that di.erences in sales, materials, labor costs and capital across firms can largely be summarized by a single, firm-specific, dynamic factor, which we label effciency in the light of our structural model. The model contains the complete system of supply and factor demand equations. It suggests that e.ciency is strongly linked to profitability and firm size, but it is unrelated to labor productivity. Our second task is to understand the origin and evolution of the differences in effciency. Among the firms established within the 24 year period that we consider, permanent differences in efficiency dominate over di.erences generated by firm-specific, cumulated innovations.
Subjects: 
effciency
firm heterogeneity
labor productivity
intrinsic differences
firmspecific innovations
state space models
maximum likelihood
JEL: 
C33
C51
D21
Document Type: 
Working Paper

Files in This Item:
File
Size
593.21 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.