Sectoral productivity in Peru: a firm-level analysis

In this paper we estimate the production function at the sectoral level in Peru. We also study and characterize the productivity of firms by using two indicators: total factor productivity and labor productivity. The data correspond to Peruvian formal firms who reported their data between 2002 and 2011. These data allow us to correct the traditional econometric problems that affect previous studies that estimate the production function in Peru (i.e., endogeneity and selection bias). We find that the capital income share is about 0.64, a parameter that is heterogeneous across the main economic sectors. Also, productivity is higher in the secondary and tertiary sectors, in large companies and among firms located in the metropolitan area of Lima. (Audio: Department of Economic Publications)