Abstract In this paper, economic productivity theory is used to develop a new profit-linked productivity measure (the PLM). The PLM model is easily operationalized by the firm; it does not require a knowledge of the firm's production function and can be computed using existing accounting data. Furthermore, the model links with both operational and partial productivity measures. The PLM is shown to have certain advantages over three previously developed profit-linked measures: the APC measure Belcher, 1984; the PPP measure Miller, 1984; and the BDK measure Banker et al., 1989.
Hansen et al. (Tue,) studied this question.