Discussion Paper 0912, "On the determinants of TFP Growth: Evidence from Spanish Manufacturing Firms", by Carmine Ornaghi & Fabio Castiglionesi
This paper explores the main determinants of productivity growth. The analysis is performed using Spanish firm-level data. We define a framework where the relative magnitudes of alternative, but not exclusive, sources of technical change is simultaneously estimated. Our main finding is that almost all the advances in technology need to be embodied either in new capital goods or in human capital. Our results contradict the existence of a positive contribution of neutral technological progress in determining the aggregate TFP growth. They also leave little room for large, unpriced effects external to the firm, both at the aggregate and industry level. We find evidence of firm-specific learning by doing, short-lived and due to adoption of new processes.
Keywords: TFP Growth, Technical Change, Human Capital, Learning by Doin
JEL Classification: L60, O30, O33