Firm-Level Total Factor Productivity Estinmation and Its Application in International Trade

¹YU Miaojie:Liaoning University

²XIE Enze,National School of Development,Peking University

Abstract：Total factor productivity measures firm's ability to transform inputs into outputs. When estimating productivity, simultaneous bias and sample selection bias often emerges. Traditional solutions include instrumental variable, fixed-effect and first order condition. Latest developments include proxy variable approach and dynamic panel approach. With micro-data's increasing availability and heterogeneous firm trade theory, relationship between trade, capital flow, special economic zone and productivity and different firms' productivity comparison have become hotspots in trade research. In future, we should focus on input factor market reforms, Sino-US trade and economic frictions and economic and trade structure reconstruction, and service trade liberalization's impact on firm's productivity.

Keywords：total factor productivity; international trade; firm heterogeneity