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International Productivity Comparisons at the Industry Level

As more and more industries experience the globalisation of business activities, measuring productivity performance has become an area of concern for companies and policy makers in Europe, the United States and Japan. This paper provides a non-technical synthesis of the productivity measurement methods used in a series of comparative industry studies. Such studies try to reach beyond standard aggregation levels for productivity measurement. Since most sectors at the two-digit or three-digit aggregation level contain a variety of industries, which can differ in capital intensity and technology used, productivity comparisons at the industry level have to take place at the fourdigit level. At this level, the possibilities to have comparable output across countries are higher and direct physical productivity measurement can become feasible. However, the need to have consistent output and input data and, if necessary, an industry-tailored currency conversion, is greater than at higher aggregation levels.