Production theory: accounting for firm heterogeneity and technical change

Dosi, Giovanni ; Grazzi, Marco ; Marengo, Luigi ; Settepanella, Simona (2014) Production theory: accounting for firm heterogeneity and technical change. Bologna: Dipartimento di Scienze economiche DSE, p. 28. DOI 10.6092/unibo/amsacta/3983. In: Quaderni - Working Paper DSE (931). ISSN 2282-6483.
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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 (1981), we propose the (normalized) volume of the zonotope composed by vectors-firms in a narrowly defined industry as an indicator of inter-firm heterogeneity. Moreover, the angles that the main diagonal of the zonotope form with the axes provide a measure of the rates and directions of technical change over time. The proposed framework can easily account 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.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Dosi, Giovanni
Grazzi, Marco
Marengo, Luigi
Settepanella, Simona
Keywords
Production theory, Heterogeneous firms, Activity Analysis, Technical change, Zonotopes, Production functions
Subjects
ISSN
2282-6483
DOI
Deposit date
12 Mar 2014 10:44
Last modified
31 Mar 2014 08:27
URI

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