IDEAS home Printed from https://ideas.repec.org/a/eee/asieco/v21y2010i4p391-403.html
   My bibliography  Save this article

An empirical analysis of Sri Lanka's Manufacturing Productivity slow-down

Author

Listed:
  • Bandara, Yapa M.W.Y.
  • Karunaratne, Neil D.

Abstract

This paper analyses empirically the changes in Sri Lanka's manufacturing productivity during a period of regime shift from import substituting industrialisation to export-oriented industrialisation. We have used a varying coefficients stochastic production frontier model on a balanced panel data set to shed light on the effects of trade liberalisation on Total Factor Productivity which incorporates both changes in Technical Efficiency and Technical Progress. The results of the empirical validation of the stochastic production frontier model reveal that there were two distinct phases of output and productivity growth under each of the two trade liberalisation episodes that occurred during 1978-88 and 1988-97, respectively. The analysis carried out in this paper decomposing Total Factor Productivity into Technical Progress and Technical Efficiency also reveals that during early years of each episode, perspiration or factor inputs was the driving force of increased output growth giving way to 'inspiration' or technical progress as each phase matured. The stochastic production frontier empirics reported in this paper together with negative feedback effects emanating from the political turmoil and the prolonged ethnic conflict virtually brought the growth of foreign direct investment to a grinding halt in late 1980s, when the election of new right-wing government appears to have given a shot in the arm to overcome the paralysis of technical progress that seem to have contributed to the productivity slow-down in Sri Lanka's manufacturing sector in the eve of the new millennium.

Suggested Citation

  • Bandara, Yapa M.W.Y. & Karunaratne, Neil D., 2010. "An empirical analysis of Sri Lanka's Manufacturing Productivity slow-down," Journal of Asian Economics, Elsevier, vol. 21(4), pages 391-403, August.
    • Handle: RePEc:eee:asieco:v:21:y:2010:i:4:p:391-403
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1049-0078(10)00027-8
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. repec:bla:jecsur:v:13:y:1999:i:2:p:149-72 is not listed on IDEAS
    2. Young, Alwyn, 1994. "Lessons from the East Asian NICS: A contrarian view," European Economic Review, Elsevier, vol. 38(3-4), pages 964-973, April.
    3. K.P. Kalirajan & M.B. Obwona & S. Zhao, 1996. "A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth before and after Reforms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 331-338.
    4. repec:ucp:ecdecc:v:48:y:2000:i:3:p:543-72 is not listed on IDEAS
    5. Breusch, T S & Pagan, A R, 1979. "A Simple Test for Heteroscedasticity and Random Coefficient Variation," Econometrica, Econometric Society, vol. 47(5), pages 1287-1294, September.
    6. Arunatilake, Nisha & Jayasuriya, Sisira & Kelegama, Saman, 2001. "The Economic Cost of the War in Sri Lanka," World Development, Elsevier, vol. 29(9), pages 1483-1500, September.
    7. Dunham, David & Kelegam, Saman, 1997. "Does leadership matter in the economic reform process? Liberalization and governance in Sri Lanka, 1989-1993," World Development, Elsevier, vol. 25(2), pages 179-190, February.
    8. Swamy, P A V B, 1970. "Efficient Inference in a Random Coefficient Regression Model," Econometrica, Econometric Society, vol. 38(2), pages 311-323, March.
    9. Kalirajan, K P & Obwona, M B, 1994. "Frontier Production Function: The Stochastic Coefficients Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(1), pages 87-96, February.
    10. Alwyn Young, 1992. "A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore," NBER Chapters, in: NBER Macroeconomics Annual 1992, Volume 7, pages 13-64, National Bureau of Economic Research, Inc.
    11. repec:ilo:ilowps:336632 is not listed on IDEAS
    12. Nishimizu, Mieko & Page, John M, Jr, 1982. "Total Factor Productivity Growth, Technological Progress and Technical Efficiency Change: Dimensions of Productivity Change in Yugoslavia, 1965-78," Economic Journal, Royal Economic Society, vol. 92(368), pages 920-936, December.
    13. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Han, Gaofeng & Kalirajan, Kaliappa & Singh, Nirvikar, 2002. "Productivity and economic growth in East Asia: innovation, efficiency and accumulation," Japan and the World Economy, Elsevier, vol. 14(4), pages 401-424, December.
    2. Han, Gaofeng & Kalirajan, Kaliappa & Singh, Nirvikar, 2004. "Productivity, efficiency and economic growth: east Asia and the rest of the world," Journal of Developing Areas, Tennessee State University, College of Business, vol. 37(2), pages 99-118, January-M.
    3. Y. Wu, 1997. "Productivity & Efficiency: Evidence from the Chinese regional economies," Economics Discussion / Working Papers 97-18, The University of Western Australia, Department of Economics.
    4. Wu, Yanrui, 2000. "Is China's economic growth sustainable? A productivity analysis," China Economic Review, Elsevier, vol. 11(3), pages 278-296.
    5. Sun, Chia-Hung, 2004. "Decomposing productivity growth in Taiwan's manufacturing, 1981-1999," Journal of Asian Economics, Elsevier, vol. 15(4), pages 759-776, August.
    6. M. Renuka & K. P. Kalirajan, 1999. "On measuring total factor productivity growth in Singapore's manufacturing industries," Applied Economics Letters, Taylor & Francis Journals, vol. 6(5), pages 295-298.
    7. Giannis Karagiannis & Vangelis Tzouvelekas, 2009. "Measuring technical efficiency in the stochastic varying coefficient frontier model," Agricultural Economics, International Association of Agricultural Economists, vol. 40(4), pages 389-396, July.
    8. Giannis Karagiannis, 2005. "Explaining output growth with a heteroscedastic non-neutral production frontier: the case of sheep farms in Greece," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 32(1), pages 51-74, March.
    9. Wong Mei Foong & Tan Hui Boon & Lee Yoong Hon, 2014. "Efficiency and Productivity Gains in Knowledge-Based Production: The Case of East Asian Economies," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 122-143.
    10. Karagiannis, Giannis & Midmore, Peter & Tzouvelekas, Vangelis, 2002. "Parametric Decomposition of Output Growth: An Input-Distance Function Approach," 2002 International Congress, August 28-31, 2002, Zaragoza, Spain 24972, European Association of Agricultural Economists.
    11. Ma, Hengyun & Rae, Allan N. & Huang, Jikun, 2004. "Livestock Productivity In China: Data Revision And Total Factor Productivity Decomposition," China Agriculture Project Working Papers 23691, Massey University, Centre for Applied Economics and Policy Studies.
    12. Jakob B. Madsen* & Md. Rabiul Islam, 2012. "The Anatomy of the Asian Take-off," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 4(2), pages 1-24, July.
    13. Zhou, Yixiao & Tyers, Rod, 2019. "Automation and inequality in China," China Economic Review, Elsevier, vol. 58(C).
    14. Atheendar S. Venkataramani & K.R. Shanmugam & Jennifer Prah Ruger, 2010. "Health, Technical Efficiency, And Agricultural Production In Indian Districts," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 35(4), pages 1-23, December.
    15. Sylviane GUILLAUMONT JEANNENEY & Ping HUA, 2003. "Taux de change réel et productivité en Chine," Working Papers 200329, CERDI.
    16. Forsund, Finn R. & Sarafoglou, Nikias, 2005. "The tale of two research communities: The diffusion of research on productive efficiency," International Journal of Production Economics, Elsevier, vol. 98(1), pages 17-40, October.
    17. Amer Bisat, 1997. "Growth, Investment, and Savings in the Arab Economies," IMF Working Papers 1997/085, International Monetary Fund.
    18. Fleur Wouterse, 2016. "Can human capital variables be technology changing? An empirical test for rural households in Burkina Faso," Journal of Productivity Analysis, Springer, vol. 45(2), pages 157-172, April.
    19. Patalinghug, Epictetus, 2001. "A Review of the Components of the Medium-Term National Action Agenda for Productivity (MNAAP) 2000-2004," Research Paper Series RPS 2001-02, Philippine Institute for Development Studies.
    20. Li, Hongyi & Wei, Xiangdong & Xie, Danyang, 2009. "Competitiveness of the Hong Kong economy," China Economic Review, Elsevier, vol. 20(3), pages 573-586, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:asieco:v:21:y:2010:i:4:p:391-403. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/asieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.