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ON THE DETERMINANTS OF TOTAL FACTOR PRODUCTIVITY GROWTH: EVIDENCE FROM SPANISH MANUFACTURING FIRMS

Published online by Cambridge University Press:  24 November 2011

Fabio Castiglionesi  and
Carmine Ornaghi
Fabio Castiglionesi*
Affiliation:
Tilburg University
Carmine Ornaghi
Affiliation:
University of Southampton
*
Address correspondence to: Fabio Castiglionesi, Department of Finance, Tilburg University, Postbus 90153, 5000 LE Tilburg, the Netherlands; e-mail: [email protected].
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Abstract

This paper explores the main determinants of productivity growth. The analysis is performed using Spanish firm-level data. We define a framework where the relative magnitudes of alternative, but not exclusive, sources of technical change are simultaneously estimated. Our main finding is that the average total factor productivity (TFP) growth is fully explained by embodied technical progress (i.e., either new capital goods or human capital). Our results contradict the existence of a positive contribution of economywide neutral technological progress in determining average TFP growth. They also leave little room for large, unpriced effects external to the firm, both at the aggregate and at the industry level. We find evidence of firm-specific learning by doing, short-lived and due to adoption of new processes.

Keywords

TFP GrowthTechnical ChangeHuman CapitalLearning by Doing
Type
Articles
Information
Macroeconomic Dynamics , Volume 17 , Issue 3 , April 2013 , pp. 501 - 530
Copyright
Copyright © Cambridge University Press 2011

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