Bounded learning-by-doing and sources of firm level productivity growth in colombian food manufacturing industry
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This paper models the bounded learning concept with the learning progress function characterized by the degree of efficiency and the specification of the learning progress as a logistic function capturing both the slow start-up and the limit in learning progress. We differentiate learning efficiency from the technical efficiency. The endogeneity corrected stochastic frontier model is then used to decompose the factor productivity growth into components associated with technological change, technical efficiency, scale, and learning. This productivity growth decomposition provides useful information and policy level insight in firm-level productivity analysis. Empirical results based on plant-level panel data on the Colombian food manufacturing industry for the period 1982–1998 suggest that productivity growth not only stems from technical progress, technical efficiency change, and scale but also from significant learning effect. The relative importance of the productivity growth components provides perspective for efficient resource allocation within the firm.
KeywordsColombian food manufacturing industry Bounded learning-by-doing Endogeneity corrected stochastic frontier Firm-level productivity growth Decomposition of productivity growth
JEL ClassificationD24 O47 C23
The authors thank the associate editor, two anonymous referees, and Cindy Cox for helpful comments. We also thank Departamento Administrativo Nacional de Estadistica (DANE) for providing access to the data.
Compliance with ethical standards
Conflict of interest
The authors declare that they have no conflict of interests.
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