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Factor productivity and technical change


  • Subal C. Kumbhakar


This paper deals with (i) decomposing total factor productivity growth into input-specific components, (ii) measuring input-specific productivity/efficiency growth, and (iii) testing several neutrality hypotheses in technical change. These issues are addressed in a general framework without assuming any functional form on the underlying production technology, and without imposing any structure on the behaviour of input productivity/efficiency growth. Using NBER panel data on 450 U.S. manufacturing industries for the period 1959--1992, it is found that technical change can be characterized by neither Hicks, Harrod, nor Solow neutral form. It is also found that productivity of capital has increased, on average by 6.5%, whereas those of labour and material declined by 5.10% and 0.4%, respectively.

Suggested Citation

  • Subal C. Kumbhakar, 2003. "Factor productivity and technical change," Applied Economics Letters, Taylor & Francis Journals, vol. 10(5), pages 291-297, April.
  • Handle: RePEc:taf:apeclt:v:10:y:2003:i:5:p:291-297
    DOI: 10.1080/1350485031000077349

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    References listed on IDEAS

    1. R. Sato & M. J. Beckmann, 1968. "Neutral Inventions and Production Functions," Review of Economic Studies, Oxford University Press, vol. 35(1), pages 1-2.
    2. R. Sato & M. Beckmann, 1968. "Neutral Inventions and Production Functions: an Addendum," Review of Economic Studies, Oxford University Press, vol. 35(3), pages 366-366.
    3. Costello, Donna M, 1993. "A Cross-Country, Cross-Industry Comparison of Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 207-222, April.
    4. Burmeister, Edwin & Dobell, Rodney, 1969. "Disembodied technological change with several factors," Journal of Economic Theory, Elsevier, vol. 1(1), pages 1-8, June.
    5. Baltagi, Badi H & Griffin, James M, 1988. "A General Index of Technical Change," Journal of Political Economy, University of Chicago Press, vol. 96(1), pages 20-41, February.
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    Cited by:

    1. M. Ali Choudhary & Vasco Gabriel, 2009. "Is there really a gap between aggregate productivity and technology?," Applied Economics, Taylor & Francis Journals, vol. 41(27), pages 3499-3503.
    2. Tinh Doan & Son Nguyen & Huong Vu & Tuyen Tran & Steven Lim, 2016. "Does rising import competition harm local firm productivity in less advanced economies? Evidence from the Vietnam's manufacturing sector," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(1), pages 23-46, February.

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