UNU-MERIT Working Papers Series

A note on testing for complementarity and substitutability in the case of multiple practices

M. Carree, Boris Lokshin & René Belderbos #2010-056

Recent empirical studies of firm-level performance have tested complementarity in the case of multiple practices. These papers have drawn conclusions using potentially biased estimates of pair-wise interaction effects. We develop a consistent and simple testing framework and test it against alternatives.

Keywords: Complementarity; Supermodularity; Firm performance

JEL-code: C12; D24

UNU-MERIT Working Papers ISSN 1871-9872

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