What Drives the Productive Efficiency of a Firm?: The Importance of Industry, Location, R&D, and Size

Table A. 1 : Production shares of inputs - descriptive statistics

Notes: p1 and p99 are the 1^st , and 99^th percentiles.
Number of observations 219,293

greater than or equal to one for estimating production for the firms in these size categories. Each
of these firms is multiplied by a factor that represents the relationship between the number of
firms in the respective industry and size that is included in our sample and the number of firms
in an industry and size category in the full population.¹⁹ Since these weights are rather stable
over time, we use the weights for 1997 in all the estimations.

Some of the cost categories, including expenditure for external wage-work and for exter-
nal maintenance and repair, contain a relatively high share of reported zero values since many
firms do not utilize these types of input. Since all inputs in a translog production function are
included in logarithms, such zero values for certain input categories would lead to missing val-
ues and result in the exclusion of the respective firm from the analysis. Moreover, zero input
values are not consistent with a translog production technology and would imply zero output.
To reduce the number of reported zero input values, we aggregated the inputs into the following
broader categories: material inputs (intermediate material consumption), labor compensation
(salaries and wages plus employer’s social insurance contribution), energy consumption, capi-
tal input (depreciation of fixed assets plus rents and leases), external services (e.g., repair costs
and external wage-work), and other inputs related to production (e.g., transportation services,
consulting, or marketing). All input and output series were deflated using the producer price in-
dex for the respective industry. Table A.2 presents the basic descriptive statistics for logarithmic
values of all output and input categories.

The yearly values of the depreciations as a proxy for capital input led to a rather low estimate
for the elasticity of the capital input. The obvious reason for this low value is the relatively high
year-to-year variation of the depreciations. To reduce this volatility, we calculated the average
yearly depreciations by adding up the depreciations in the current year and for all the preceding
years that we have in our data. This sum was then divided by the number of respective years.²⁰

¹⁹As an example, if only 25 percent of the firms of a particular size class are included in the sample, each
observation is multiplied by a factor of 4.

²⁰Example: Assume that the dataset provides information on depreciations of a certain firm for 1993, 1994,
1995, and 1996. Average yearly depreciation for 1995 is the average for 1993-1995. For 1996, it is the average for
1993-1996, etc. For 1993, the average equals the value for this year.

28

<<   <   28   29   30   31   32