Olley and Pakes‐style Production Function Estimators with Firm Fixed Effects
研究发现Olley-Pakes等控制函数估计量在生产率存在企业特定截距时可能有偏，提出在控制函数中加入企业固定效应来消除偏误，新估计量易于实现且优于现有方法。
Abstract We show that control function estimators (CFEs) of the firm production function, such as Olley–Pakes, may be biased when productivity evolves with a firm‐specific intercept, in which case the correctly specified control function will contain a firm‐specific term, omitted in the standard CFEs. We develop an estimator that is free from this bias by introducing firm fixed effects in the control function. Applying our estimator to the data, we find that it outperforms the existing CFEs in terms of capturing persistent unobserved heterogeneity in firm productivity. Our estimator involves minimal modification to the standard CFE procedures and can be easily implemented using common statistical software.