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Full-Text Articles in Industrial Organization
Imperfect Competition And Total Factor Productivity Growth, Azzeddine Azzam, Elena Lopez, Rigoberto Lopez
Imperfect Competition And Total Factor Productivity Growth, Azzeddine Azzam, Elena Lopez, Rigoberto Lopez
Azzeddine Azzam
This article examines the role of imperfect competition in determining total factor productivity growth (TFPG) by bringing together a New Empirical Industrial Organization (NEIO) model and the TFPG model of Good, Nadiri and Sickles (1999). Application of the integrated model to 1973-1992 data from 29 food processing industries revealed that, overall, changes in markups, economies of scale, and demand growth contributed positively to TFPG while the disembodied technical change was a negative contributor. Furthermore, the factors underlying the TFPG estimates are interactive and their net effects are starkly different from the conventional Solow (1957) residual TFPG measures, underscoring the need …