Olley Pakes Estimation

[neha sharma]

Respected members,

I have a balanced panel data (N=71, T=15). One of my objectives require to check the impact of technology spillovers on productivity. For this, my dependent variable is output and the independent variables include labor, capital, materials, technology spill, costs, capital intensity, age and size. Since I cannot use OLS to estimate productivity (as it treats labor and other inputs as exogenous variables), I have to apply Olley Pakes estimation procedure.

If anyone could please explain what exact command I should give for olley pakes. I reffered to stata help but could not understand completely. What value I should give for rep? Moreover I want to use this command without exit option. Is it possible?

In addition to this,I read that productivity estimated through olley pakes would be used in OLS further. How is that done?


Thanks and Regards!


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[Carlo Lazzaro]

Neha:
typing -search Olley Pakes- from within Stata gives back some (hopefully) promising entries.

[neha sharma]

Thanks Carlo. I tried that but I still wanted to know if I could use it without exit option. I did find few entries but all with exit option.
Levinsohn-Patrin was rather mostly used method to estimate productivity (what I observed from the search).

[neha sharma]

If I use exit as a dummy variable coding only '0's (indicating no exit) since I am not taking exit of a firm into consideration, will that work?

[Carlo Lazzaro]

Neha:
sorry I cannot be more helpful.