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Sources of Australia's Productivity Revival

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  • Dean Parham

Abstract

Australia's annual rate of multifactor productivity growth accelerated a full percentage point in the 1990s. The fact that most other OECD countries did not share this experience suggests that domestic factors must have provided at least a major part of the explanation. This article establishes six stylised facts about Australia's 1990s productivity performance and then surveys available analytical studies to find explanations for them. With few aggregate models available to shed light on recent output and productivity growth, the survey also covers cross-country, industry and firm-level studies. Despite various shortcomings in data and specification of models, a reasonably clear picture emerges. The accumulation of physical and human capital has laid a long-term foundation for productivity growth. On top of this foundation, the greater openness of the economy to trade and investment, increased R&D activity and a strong uptake and innovative use of ICT have been specific sources of the productivity revival. There is also evidence that policy and institutional factors have been important in driving and enabling these determinants. Copyright © 2004 Economic Society of Australia..

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  • Dean Parham, 2004. "Sources of Australia's Productivity Revival," The Economic Record, The Economic Society of Australia, vol. 80(249), pages 239-257, June.
  • Handle: RePEc:bla:ecorec:v:80:y:2004:i:249:p:239-257
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    Cited by:

    1. Kym Anderson & Peter Lloyd & Donald Maclaren, 2007. "Distortions to Agricultural Incentives in Australia Since World War II," The Economic Record, The Economic Society of Australia, vol. 83(263), pages 461-482, December.
    2. Samantha Farmakis‐Gamboni & David Prentice, 2011. "When Does Reducing Union Bargaining Power Increase Productivity? Evidence from the Workplace Relations Act," The Economic Record, The Economic Society of Australia, vol. 87(279), pages 603-616, December.
    3. Richard B. Freeman, 2006. "Learning from Other Economies: The Unique Institutional and Policy Experiments Down Under," The Economic Record, The Economic Society of Australia, vol. 82(257), pages 195-206, June.
    4. Ben Dolman, 2009. "What Happened to Australia's Productivity Surge?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(3), pages 243-263.
    5. Marika Karanassou & Hector Sala, 2010. "Labour Market Dynamics in Australia: What Drives Unemployment?," The Economic Record, The Economic Society of Australia, vol. 86(273), pages 185-209, June.
    6. Ben Dolman & Dean Parham & Simon Zheng, 2007. "Can Australia Match US Productivity Performance?," Staff Working Papers 0703, Productivity Commission, Government of Australia.
    7. Ben Dolman & Lan Lu & Jyoti Rahman, 2006. "Understanding productivity trends," Economic Roundup, The Treasury, Australian Government, issue 1, pages 35-52, March.
    8. Mullen, John D., 2007. "Productivity growth and the returns from public investment in R&D in Australian broadacre agriculture," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 51(4), December.
    9. Chris Sadleir & Greg Mahony, 2009. "Institutional Challenges and Response in Regulating Foreign Direct Investment to Australia," Economic Papers, The Economic Society of Australia, vol. 28(4), pages 337-345, December.
    10. Ellis Connolly & Linus Gustafsson, 2013. "Australian Productivity Growth: Trends and Determinants," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(4), pages 473-482, December.
    11. Richard G. Harris & Peter E. Robertson, 2007. "Dynamic Adjustments to Terms of Trade Shocks: The USA Productivity Boom and Australia," Discussion Papers 2007-16, School of Economics, The University of New South Wales.
    12. Turnbull, Christopher & Sun, Sizhong & Anwar, Sajid, 2016. "Trade liberalisation, inward FDI and productivity within Australia’s manufacturing sector," Economic Analysis and Policy, Elsevier, vol. 50(C), pages 41-51.
    13. Jyoti Rahman & David Stephan & Gene Tunny, 2009. "Estimating trends in Australia's productivity," Treasury Working Papers 2009-01, The Treasury, Australian Government, revised Feb 2009.
    14. Christopher Findlay, 2011. "Services Trade and Investment Liberalization," Chapters,in: The Economics of East Asian Integration, chapter 8 Edward Elgar Publishing.
    15. Shahiduzzaman, Md. & Alam, Khorshed, 2014. "Information technology and its changing roles to economic growth and productivity in Australia," Telecommunications Policy, Elsevier, vol. 38(2), pages 125-135.
    16. Andrew Sharpe, 2007. "Lessons for Canada from International Productivity Experience," International Productivity Monitor, Centre for the Study of Living Standards, vol. 14, pages 20-37, Spring.
    17. Dean Parham, 2013. "Australia's Productivity: Past, Present and Future," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 46(4), pages 462-472, December.
    18. Samantha Farmakis-Gamboni & David Prentice, 2007. "Does Reducing Union Bargaining Power Increase Productivity?," Working Papers 2007.04 EDIRC Provider-In, School of Economics, La Trobe University.
    19. Robert Dixon & John Freebairn, 2007. "Hours of Work: A Demand Perspective," Department of Economics - Working Papers Series 1022, The University of Melbourne.
    20. Mullen, John D. & Scobie, Grant M. & Crean, Jason, 2006. "Trends in Research, Productivity Growth and Competitiveness in Agriculture in New Zealand and Australia," 2006 Conference, August 24-25, 2006, Nelson, New Zealand 31965, New Zealand Agricultural and Resource Economics Society.
    21. Harry Bloch, 2010. "Technological Change in Australian Manufacturing," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 43(1), pages 28-38.
    22. Robert Breunig & Marn-Heong Wong, 2008. "A Richer Understanding of Australia's Productivity Performance in the 1990s: Improved Estimates Based Upon Firm-Level Panel Data," The Economic Record, The Economic Society of Australia, vol. 84(265), pages 157-176, June.
    23. Graeme Davis & Jyoti Rahman, 2006. "Perspectives on Australia's productivity prospects," Treasury Working Papers 2006-04, The Treasury, Australian Government, revised Sep 2006.
    24. Graeme Davis & Gene Tunny, 2005. "International comparisons of research and development," Economic Roundup, The Treasury, Australian Government, issue 4, pages 63-82, December.

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