The paper presents a new framework to assess firm level heterogeneity and to study the rate and direction of technical change. Building on the analysis of revealed short-run production functions by Hildenbrand (), we propose the (normalized) volume of the zonotope composed by vectors-firms as indicator of inter-firm heterogeneity. Moreover, the angles that the zonotope's main diagonal form with the axes provide a measure of the rates and directions of productivity change. The proposed framework also accounts for n-inputs and m-outputs and, crucially, the measures of heterogeneity and technical change do not require many of the standard assumptions from production theory.

Production Theory: Accounting for Firm Heterogeneity and Technical Change

Dosi, Giovanni
;
Grazzi, Marco;Marengo, Luigi;Settepanella, Simona
2016

Abstract

The paper presents a new framework to assess firm level heterogeneity and to study the rate and direction of technical change. Building on the analysis of revealed short-run production functions by Hildenbrand (), we propose the (normalized) volume of the zonotope composed by vectors-firms as indicator of inter-firm heterogeneity. Moreover, the angles that the zonotope's main diagonal form with the axes provide a measure of the rates and directions of productivity change. The proposed framework also accounts for n-inputs and m-outputs and, crucially, the measures of heterogeneity and technical change do not require many of the standard assumptions from production theory.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11382/521767
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