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Returns to Scale, Technical Progress and Total Factor Productivity Growth in New Zealand Industries

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Abstract

This paper reviews and applies some recently proposed methods for separating total factor productivity (TFP) growth into contributions from technical progress and returns to scale, allowing for imperfectly competitive markets. The methods are applied to New Zealand data, using a recently available dataset on nine market-sector industries and the aggregate market sector, 1988-2002. The findings suggest that there has been little contribution from technical progress to TFP growth, but increasing returns to scale may have played a substantial role. However, the results are not statistically satisfactory for several industries, and are quite sensitive to the model used. This highlights the need for more work on both data and analysis if a better understanding is to be had of New Zealand’s productivity performance.

Suggested Citation

  • Kevin J Fox, 2005. "Returns to Scale, Technical Progress and Total Factor Productivity Growth in New Zealand Industries," Treasury Working Paper Series 05/04, New Zealand Treasury.
    • Handle: RePEc:nzt:nztwps:05/04
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    File URL: https://treasury.govt.nz/sites/default/files/2007-10/twp05-04.pdf
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    Cited by:

    1. Daan Steenkamp, 2018. "Factor Substitution and Productivity in New Zealand," The Economic Record, The Economic Society of Australia, vol. 94(304), pages 64-79, March.
    2. Philip McCann, 2009. "Economic geography, globalisation and New Zealand's productivity paradox," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(3), pages 279-314.

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    More about this item

    Keywords

    Returns to scale; technical progress; monopolistic markups;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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