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Productivity and Technical Change: The Case of Taiwan

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Author Info
R. Fare (Southern Illinois Univ. at Carbondale)
Shawna Grosskopf (Southern Illinois Univ. at Carbondale)
W-F Lee

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Abstract

"Technical change" and "technical efficiency change" are two key factors to productivity growth that are associated with different sources; hence, different policies may be required to address them. Therefore, it is important to decompose productivity growth into these two components. Technical change may be further decomposed into output- and input-biases. These biases have impacts on factor income distribution and hence policy implications associated with them. It is therefore important to identify the output- and input-bias components of technical change and measure them empirically. In this paper, we explore the above issues for the disaggregate cases of 18 Taiwan manufacturing industries at the 2-digit level grouping during the period 1978-92. To pursue our goal we decompose the Malmquist total factor productivity (TFP) index into two components: technical change and technical efficiency change. Here, however, we further decompose the technical change component; in particular we define output bias, input bias and a magnitude term. In addition, we are able to identify the directions of the input biases.

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Paper provided by EconWPA in its series GE, Growth, Math methods with number 9509001.

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Length: 33 pages
Date of creation: 29 Sep 1995
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Handle: RePEc:wpa:wuwpge:9509001

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Find related papers by JEL classification:
C6 - Mathematical and Quantitative Methods - - Mathematical Methods and Programming
D5 - Microeconomics - - General Equilibrium and Disequilibrium
D9 - Microeconomics - - Intertemporal Choice and Growth

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-76, December. [Downloadable!] (restricted)
  2. Diewert, Erwin, 2007. "Index Numbers," UBC Departmental Archives diewert-07-01-03-08-17-23, UBC Department of Economics, revised 31 Jan 2007. [Downloadable!]
  3. Diewert, W E, 1980. "Capital and the Theory of Productivity Measurement," American Economic Review, American Economic Association, vol. 70(2), pages 260-67, May. [Downloadable!] (restricted)
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Cited by:
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  1. Kumar, Surender, 2004. "Decomposition of total factor productivity growth: A regional analysis of Indian industrial manufacturing growth," Working Papers 22, National Institute of Public Finance and Policy. [Downloadable!]
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