Fixed Cost, Imperfect Competition and Bias in Technology Measurement: Japan and The United States

In many industries, competition is far from perfect and managerial efficiency (or a fixed cost) varies among firms. However, traditional measurement of technological progress assumes perfect competition and no fixed cost. This paper incorporates these two factors in the technological-progress measur...

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Bibliographic Details
Main Author: Nishimura, Kiyohiko G.. (Author)
Other Authors: Shirai, Masato (Contributor)
Format: Electronic eBook
Language:English
Published: Paris OECD Publishing 2000
Series:OECD Economics Department Working Papers no.273
Subjects:
Online Access:DE-862
DE-863
Summary:In many industries, competition is far from perfect and managerial efficiency (or a fixed cost) varies among firms. However, traditional measurement of technological progress assumes perfect competition and no fixed cost. This paper incorporates these two factors in the technological-progress measurement and investigates the biases caused by their omission. We show that if capital growth exceeds non-capital-input growth and that firms earn a positive pure profit, then traditional measurement underestimates the true technological progress. We apply this methodology to Japanese and US industries, and find that imperfect competition and managerial efficiency are important. However, the magnitude of the bias is not large ...
Physical Description:1 Online-Ressource (42 Seiten) 21 x 29.7cm.

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