A0692
Title: A system approach to structural identification of production functions with multidimensional productivity spillovers
Authors: Zhezhi Hou - Southwestern University of Finance and Economics (China) [presenting]
Abstract: Many recent researchers in production economics believe technological growth can enhance the productivity of all factors of production equally, or they can exhibit bias toward specific factors. A novel methodology is provided on the estimation of labor augmenting and Hicks Neutral productivity of firms in the presence of productivity spillovers originating from two sources - the spatiotemporal spillovers in Hicks Neutral productivity and in their labor augmenting counterpart. Previous work is extended by allowing these two forms of productivity to both follow the Markov process, which could be affected by the cross-sectional dependence in multidimensional productivity induced by spillovers and then develop an identification strategy based on a proxy variable method and first-order conditions.
