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Technical Efficiency and U.S. Manufacturing Productivity Growth


Author Info

  • Jeffrey I. Bernstein

    (Carleton University and NBER)

  • Theofanis P. Mamuneas

    (University of Leicester and University of Cyprus)

  • Panos Pashardes

    (University of Cyprus)


This paper establishes that new inputs increase technical efficiency levels for U.S. manufacturing. Over the period 1950-1998, intermediate inputs exhibited higher rates of efficiency growth than labor and capital. Efficiency-adjusted productivity growth annually averaged 0.4 percentage points above measured growth. The gap between efficiency-adjusted and measured productivity growth arises from aggregating inputs using observed, and not efficiency-adjusted, cost share weights in the calculation of measured growth. Specifically, the decline in efficiency-adjusted material cost shares, compared to the measured shares, coupled with the comparatively high material input growth rate, was the main source of the productivity gap. © 2004 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by MIT Press in its journal Review of Economics and Statistics.

Volume (Year): 86 (2004)
Issue (Month): 1 (February)
Pages: 402-412

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Handle: RePEc:tpr:restat:v:86:y:2004:i:1:p:402-412

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Cited by:
  1. Jeffrey I. Bernstein & Theofanis P. Mamuneas, 2007. "Irreversible Investment, Capital Costs and Productivity Growth: Implications for Telecommunications," NBER Working Papers 13269, National Bureau of Economic Research, Inc.
  2. Supawat Rungsuriyawiboon & Spyro Stefanou, 2004. "The Dynamics of Efficiency and Productivity Growth in U. S. Electric Utilities," Working Papers, University of Crete, Department of Economics 0711, University of Crete, Department of Economics, revised 00 Aug 2006.
  3. Jeffrey I. Bernstein & Theofanis P. Mamuneas, 2007. "Public Infrastructure, Input Efficiency and Productivity Growth in the Canadian Food Processing Industry," Working Papers, Florida International University, Department of Economics 0703, Florida International University, Department of Economics.
  4. Elena Ketteni & Theofanis Mamuneas & Panos Pashardes, 2013. "ICT and Energy Use: Patterns of Substitutability and Complementarity in Production," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, University of Cyprus, Economics Research Centre, vol. 7(1), pages 63-86, June.
  5. Peter Thompson, 2007. "Entrepreneurs, Managers, and the Organization of Work," Working Papers, Florida International University, Department of Economics 0706, Florida International University, Department of Economics.


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