Inaugural address given in shortened form at the occasion of accepting the
appointment as professor of business administration, in particular the
measurement of price, quantity, and productivity changes and
economic-statistical research, supported by Statistics Netherlands, at the
Rotterdam School of Management / Faculteit Bedrijfskunde of Erasmus
University Rotterdam on Friday, November 9, 2001Productivity is an important component of profitability, and therefore an important variable for monitoring and benchmarking exercises. This paper discusses the necessary accounting model as well as the various measurement problems one gets involved in. By virtue of its structural features, this model is applicable to individual firms and aggregates such as industries or economies.Though the measurement of productivity change and productivity differences is important, more important is their explanation. Thus firstly, this paper reviews recent results relating to the decomposition of aggregate productivity change into components due to firm dynamics and intra-firm productivity change. All these results were obtained by studying longitudinal enterprise microdata sets. Secondly, this paper reviews a number of methods for decomposing productivity change and productivity differences, whether at the individual firm level or at aggregate level, into partial measures relating to technological change and efficiency change. The combination of both research strategies seems to be a promising undertaking
