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Factor Accumulation and Total Factor Productivity Growth: ASEAN Economies

Author

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  • Munusamy, Subramaniam

    (Manipal International University 71800 Putra Nilai Negeri Sembilan Darul Khusus MALAYSIA)

  • Rajamoorthy, Yogambigai

    (Faculty of Accountancy and Management Tunku Abdul Rahman University Lot PT 21144, Jalan Sungai Long 43000 Kajang, Selangor MALAYSIA)

Abstract

This study examines the contribution of factor accumulation on Total Factor Productivity (TFP) growth in the eight ASEAN countries with specific reference to short-term and long-term estimation effect. Using Mean Group (MG) estimator on data between 1990 and 2018, this study found a significant relationship between capital accumulation and TFP growth. Our analysis suggests that the positive growth on TFP in most ASEAN countries was due to the short-run effect of capital accumulation. This study also found that the ASEAN economies have a relatively lower rate of capital utilization that adversely affects TFP growth in the long run. The contribution of TFP to output growth is paramount for the sustainability of long-term economic growth. Thus, ASEAN countries need to accelerate capital accumulation and technology adoption in the short-term and utilize idle capital in the long-term.

Suggested Citation

  • Munusamy, Subramaniam & Rajamoorthy, Yogambigai, 2020. "Factor Accumulation and Total Factor Productivity Growth: ASEAN Economies," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 54(2), pages 67-76.
    • Handle: RePEc:ukm:jlekon:v:54:y:2020:i:2:p:67-76
    DOI: http://dx.doi.org/10.17576/JEM-2020-5402-6
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