Essays on productivity: Applications to automobile assembly and African manufacturing

Productivity measures the shift in the cost or production function. It is the fraction of output change not accounted for by changes in input use or returns to scale. Everything about the production process that is not controlled for potentially ends up in productivity. By definition, it is also a relative concept, used to compare different plants or the same plant across years. It is only defined relative to a specific production or cost function and there are significant measurement problems to overcome. Some are the result of discrepancies between the data and the economic concept they are supposed to capture. Others stem from having to control for intrinsically unobservable variables. As a result, the economic interpretation of productivity estimates is not always straightforward.;On this crossroad of measurement, comparison, and interpretation, I present three applications. The first study investigates technology adoption and the effect on the evolution of productivity in the automobile assembly industry in the United States. Technology choice is unobserved and I develop an estimator to jointly estimate two different technologies, one for lean and one for mass production, and the choice between both. The second study analyzes the processes of firm development at work in the manufacturing sector of nine sub-Saharan African countries. I document a number of stylized facts that conflict with the standard model of firms development, which relies on the experience of firms in developed countries. The pattern that emerges is a dichotomous development process. Some firms are more productive, larger, and grow faster, others are stuck at the bottom of the distribution. The third study compares the performance of exporters and non-exporters for the same sample of African firms. The correlation between productivity and export status is positive and remains significant when controlling for the endogeneity of the export decision. More productive plants self-select in the export market, but at the same time, exporters reap benefits from their export activity, which allows them to raise productivity.