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Multifactor productivity growth and the Australian mining sector

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  • Arif Syed
  • R. Quentin Grafton
  • Kaliappa Kalirajan
  • Dean Parham

Abstract

type="main" xml:id="ajar12122-abs-0001"> A commonly used, but unadjusted, measure of Australian mining multifactor productivity (MFP) fell by about one-third over the first decade of the mining boom, coinciding with very large increases in resource prices. Using growth accounting methods and our own adjustments, based on energy use and capital-output lags to account for depletion effects we find (i) the Australian annual average MFP growth in mining was 2.5 per cent a year between 1985–1986 and 2009–2010 compared to −0.65 per cent for the unadjusted measure and (ii) productivity growth was positive in the 2000s, albeit at a lower rate than in the 1990s. Our adjusted MFP growth measures at a state level and subsector level are greater than unadjusted productivity measures. In a complementary study using an econometric decomposition of mining MFP at a state level, we find no statistically significant effect of technological change on MFP growth in the sector, but positive and statistically significant effects of technical efficiency and scale over the period 1990–1991 to 2009–2010. Our results do not support specific policy interventions to increase productivity growth in the mining sector beyond appropriate incentives for resource exploration including the provision of precompetitive resource data.

Suggested Citation

  • Arif Syed & R. Quentin Grafton & Kaliappa Kalirajan & Dean Parham, 2015. "Multifactor productivity growth and the Australian mining sector," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(4), pages 549-570, October.
    • Handle: RePEc:bla:ajarec:v:59:y:2015:i:4:p:549-570
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    File URL: http://hdl.handle.net/10.1111/ajar.2015.59.issue-4
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    Cited by:

    1. Hosseinzadeh, Ahmad & Smyth, Russell & Valadkhani, Abbas & Le, Viet, 2016. "Analyzing the efficiency performance of major Australian mining companies using bootstrap data envelopment analysis," Economic Modelling, Elsevier, vol. 57(C), pages 26-35.
    2. Sabuj Kumar Mandal & Devleena Chakravarty, 2017. "Role of energy in estimating turning point of Environmental Kuznets Curve: an econometric analysis of the existing studies," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 19(2), pages 387-401, October.
    3. Ahmad Hosseinzadeh & Russell Smyth & Abbas Valadkhani & Amir Moradi, 2018. "What determines the efficiency of Australian mining companies?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(1), pages 121-138, January.
    4. Villena, Marcelo & Greve, Fernando, 2018. "On resource depletion and productivity: The case of the Chilean copper industry," Resources Policy, Elsevier, vol. 59(C), pages 553-562.
    5. Ahmad, Shabbir & Steen, John & Ali, Saleem & Valenta, Rick, 2023. "Carbon-adjusted efficiency and technology gaps in gold mining," Resources Policy, Elsevier, vol. 81(C).
    6. Sahoo, Auro Kumar & Sahu, Naresh Chandra & Sahoo, Dukhabandhu, 2018. "Impact of policy reforms on the productivity growth of Indian coal mining: A decomposition analysis," Resources Policy, Elsevier, vol. 59(C), pages 460-467.

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