Moynihan Institute of Global Affairs
Trade, Development and Political Economy presents
Estimating Production Functions in Differentiated-Product Industries with Quantity Information and External Instruments
The authors develop a new method for estimating production-function parameters that can be applied in differentiated-product industries with endogenous quality and variety choice. They take advantage of data on physical quantities of outputs and inputs from the Colombian manufacturing census, focusing on producers of rubber and plastic products. Their estimates differ from those of existing methods and their preferred productivity estimate performs relatively well in predicting future export performance.
Authors: Nicolás de Roux, Marcela Eslava, Santiago Franco and Eric Verhoogen
Eric Verhoogen is Professor of Economics at Columbia University. His main research area is industrial development -- firms, innovation, productivity, trade, industrial policy, labor markets in developing countries. His research has been published in top Economics journals like the American Economic Review, Quarterly Journal of Economics and the Review of Economic Studies. Professor Verhoogen was the co-editor of the Journal of Development Economics from 2009 to 2013. He holds a PhD in Economics from the University of California – Berkeley.
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