Productivity Measurement With Big Data: A Data‐Driven Approach Capturing Firm Heterogeneity

ABSTRACT We develop a new method for estimating production frontiers that allows the identification of sources of firm productivity variability. Our novel approach enhances the understanding of productivity growth and its sources, and the role of firm dynamics on growth. The empirical results using Australian firm‐level data demonstrate that the approach can provide important insights, which can better inform policy formulation.