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Total Factor Productivity of Korean Manufacturing Industries: Comparison of Competing Models with Firm-Level Data

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  • Dong-hyun Oh
  • Almas Heshmati
  • Hans Loof

    ()
    (Technology Management, Economics and Policy Program(TEMEP), Seoul National University)

Abstract

This paper presents the parametric estimation of the rates of technical change and total factor productivity (TFP) growth of 7,462 Korean manufacturing firms for the period 1987 to 2007. Two alternative formulations of technical change measured by the time trend and the general index approaches are estimated with panel data models assuming flexible functional forms. Several extensions of each approach are also onsidered and their benefits and limitations are discussed. In addition to making estimates of the TFP growth and its decomposition, the paper compares the parametric TFP growth measure with the non-parametric Solow residual serving as a benchmark. Several hypotheses related to technology level, firm sizes, industrial sectors, skill biased technological change and macroeconomic and industrial policies are tested to explain the growth patterns and heterogeneity in technical change, input biases and TFP growth rates. Using second regression analysis, the paper explores the determinants of TFP growth and their policy implications.

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File URL: ftp://147.46.237.98/DP-22.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by Seoul National University; Technology Management, Economics, and Policy Program (TEMEP) in its series TEMEP Discussion Papers with number 200922.

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Length: 31 pages
Date of creation: Oct 2009
Date of revision: Nov 2009
Handle: RePEc:snv:dp2009:200922

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Keywords: Total factor productivity; technical change; manufacturing industry; determinants of growth;

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Cited by:
  1. Subal Kumbhakar & Kai Sun, 2012. "Estimation of TFP growth: a semiparametric smooth coefficient approach," Empirical Economics, Springer, Springer, vol. 43(1), pages 1-24, August.

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