This paper studies aggregate productivity growth (APG) in Services and Industry in Colombia from 2007 to 2019 applying Petrin and Levinsohn (2012) framework, where APG is decomposed in two effects: resource reallocation and technical efficiency. Using data from National Surveys of Services and Industry, the results for both sectors combined show that APG decreased on average -0.69% over the period examined, explained because the reallocation effect (negative) dominates over the technical efficiency one. When studying each sector independently, Ser- vices present a negative APG on average of -0.96%, explained also by the negative effect of reallocation of resources, bigger in magnitude com- pared to the technical efficiency effect. In the case of Industry, APG is negative and equal to -0.11%, but in this case, the effect that dominates the explanation is the technical efficiency. This paper also estimates the Cost of Use of Capital for these sectors with a result of 16.2% on average for the period of study. Finally, this document provides a welfare interpretation of APG.
publication date
May 18, 2021 12:56 PM
Research
keywords
Analysis of aggregate productivity growth
Analysis of industrial growth with the Petrin and Levinsohn methodology
Cost of Use of Capital
Growth of the Services and Industry sectors in Colombia
