A1 Refereed original research article in a scientific journal

Structural change decomposition of productivity without share weights




AuthorsKuosmanen Timo, Kuosmanen Natalia

PublisherElsevier

Publication year2021

JournalStructural Change and Economic Dynamics

Journal name in sourceStructural Change and Economic Dynamics

Volume59

First page 120

Last page127

ISSN0954349X

eISSN1873-6017

DOIhttps://doi.org/10.1016/j.strueco.2021.08.011

Web address https://doi.org/10.1016/j.strueco.2021.08.011


Abstract

Structural change is important driver of productivity. Existing decompositions of structural change rely heavily on the share weights of firms. Ideally, one would need a complete census of all firms to calculate the share weights. However, empirical data are often less than ideal. Another limitation of the structural change decompositions is that existing firms that switch from one industry to another are mixed with startups and bankrupt firms. To address both these limitations, we develop an alternative productivity decomposition of structural change that avoids the use of share weights, which can be useful whenever the share weights are problematic or unavailable. Our decomposition also takes the product switch explicitly into account and applies to both the level and percentage change of productivity. Application to Finnish agriculture illustrates the proposed approach.



Last updated on 2024-26-11 at 14:58