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Factor Contribution and Productivity Growth in Underdeveloped Agriculture: A Study from Liberalised India


  • Atanu Sengupta

    (Department of Economics, Burdwan University, Burdwan, West Bengal, India)

  • Subrata Kundu

    (Department of Economics with Rural Development, Vidyasagar University, Midnapur, West Bengal, India)


Productivity growth is essential for economic enhancement of any country. However it is empirically quite perplexing to estimate it. The standard practice is to estimate productivity changes by incorporating a time trend within the production function (Baltagi and Griffin 1988; Kumbhakar and Hesmati 1996; Stevenson 1980 among others). This provided a measure of overall technical change often coined as Total Factor Productivity (TFP). However the problem with TFP is its inability to decompose into various factors specific effects. The alternative is to visualize technical change within a Factor Augmenting (FA) approach (Beckmann and Sato, 1969; Sato and Beckmann, 1969; Kumbhakar, 2002, 2004). This approach enables us to disentangle different factor contributions to overall technical change. Applying the methodology to the Indian state of West Bengal reveals a lopsided technical change with sufficient amount of surplus labour and inefficient capital use. Serious policy action is necessary to remedy this situation.

Suggested Citation

  • Atanu Sengupta & Subrata Kundu, 2008. "Factor Contribution and Productivity Growth in Underdeveloped Agriculture: A Study from Liberalised India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 43(2), pages 265-285, December.
  • Handle: RePEc:dse:indecr:v:43:y:2008:i:2:p:265-285

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    References listed on IDEAS

    1. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
    2. William James Adams, 2006. "Markets: Beer in Germany and the United States," Journal of Economic Perspectives, American Economic Association, vol. 20(1), pages 189-205, Winter.
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    5. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization,in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057 Elsevier.
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    Cited by:

    1. Dilip Saikia, 2014. "Total Factor Productivity In Agriculture: A Review Of Measurement Issues In The Indian Context," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 8(2), pages 45-61, DECEMBER.
    2. repec:ags:ingawp:253311 is not listed on IDEAS
    3. Nabi Abudaldah & Wim Heijman & Pieter Heringa & Pierre v. Mouche, 2015. "Return Of The Icecream Men. A Discrete Hotelling Game," Romanian Journal of Regional Science, Romanian Regional Science Association, vol. 9(2), pages 39-48, DECEMBER.
    4. repec:ags:ingawp:253314 is not listed on IDEAS
    5. Saikia, Dilip, 2009. "Total Factor Productivity in Indian Agriculture: Some Conceptual and Methodological Issues," MPRA Paper 28578, University Library of Munich, Germany, revised Apr 2010.

    More about this item


    Agricultural Growth; Efficiency; Underdeveloped Economy; Growth Diversity.;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being


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