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Journal of Economic Behavior & Organization, forthcoming ⋆ Not for publication.

By Fabrice Defever A and Farid Toubal B


We use the Olley and Pakes (1996) (OP) semiparametric method to estimate firm-level TFP. Estimations have been made for each one of the 52 sectors (3 digit). This method allows a robust estimation of the production function. It takes into account the endogeneity of some inputs, as well as the unobserved permanent differences among firms. The main assumption that the OP technique relies on, is the existence of a monotonic relationship between investment and firm-level unobserved heterogeneity. We consider the following Cobb-Douglas production functio

Year: 2013
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