A Richer Understanding of Australia's Productivity Performance in the 1990s: Improved Estimates Based Upon Firm‐Level Panel Data*

Abstract

Australian industry is characterised by differences across firms, entry of new firms and exit of unsuccessful firms. These facts highlight the inappropriateness of measuring productivity using aggregate production functions based upon representative firms. In this study, we model heterogeneous firms which change over time. We model the interrelationship between productivity shocks, input choices and decisions to cease production. Firm‐level data provides production function estimates for 25 two‐digit Australian industries. A new aggregation method for industry‐level data allows us to separate productivity changes from output composition changes. Our study sheds new light on the Australian productivity performance.

When Does Reducing Union Bargaining Power Increase Productivity? Evidence from the Workplace Relations Act*

“…In comparison, Tseng and Wooden (2001) also find decreasing returns to scale, though our estimates are much lower than theirs. Breunig and Wong (2008), using a modified Olley-Pakes approach, and the full BLS dataset, rather than just the CURF, find roughly constant returns to scale. Like Tseng and Wooden (2001) (but unlike most earlier Australian studies), we find union status is associated with higher productivity.…”

“…More firms were sampled in the first year than in subsequent years, with firms identified as growing rapidly, innovating or exporting over-sampled from the first year in later years. The BLS data are used in many studies including Tseng and Wooden (2001), Farmakis-Gamboni (2006) and Breunig and Wong (2008).…”

Productivity, outsourcing and exit: the case of Australian manufacturing

“…Following Breunig and Wong (2008), I find the leasing stock for each firm as the reported leasing expenses divided by r þ d, where r ¼ 0:0803 is the average return on treasury bonds over the period July 1994 to June 1998. d ¼ 0:05 is the average rate of depreciation for capital assuming that the average useful life of capital is about 20 years. The ABS commodity price index for machinery and equipment (ANZSIC 28) is used to deflate the nominal capital stock.…”

The Role of Firm Dynamics in Australia's Productivity Growth

“…However, this would only be a basis for a policy of saving low productivity entrants from failure if the government could successfully pick which firms will fulfill their potential or if the average expected productivity of these low productivity entrants is higher than the average expected productivity of incumbents. Breunig and Wong (2006a). Analysis reported in this article is based on the Main Unit Record File (MURF) of the BLS, which includes large firms in addition to small-and medium-sized firms.…”