Productivity and Openness: Firm Level Evidence in Brazilian Manufacturing Industries


This study investigates the productivity of Brazilian manufacturing industries, particularly addressing the influence of liberalization on productivity. We first calculate total factor productivity (TFP) by estimating the stochastic frontier production function and the inefficiency determination equation simultaneously. Then TFP growth rates are regressed on openness-related variables and other firm characteristics. The results show that firm openness to the world is a crucial determinant of their productivity. Data used for this study were obtained from the Investment Climate Survey, provided by the World Bank.


TFP, liberalization, Brazil, stochastic frontier analysis

JEL Classification

D22, O12, O54


Wenjun LIU
College of Economics and Management, Univ. of South China
Hengyang, Hunan Province, China

Research Institute for Economics and Business Administration, Kobe University, Nada-ku, Kobe, Japan