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The productivity debate of East Asia revisited: a stochastic frontier approach

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  • Sangho Kim
  • Young Hoon Lee

Abstract

This paper applies a stochastic frontier production model to the data from Penn World Table's 49 countries over the period 1965 to 1990, to decompose total factor productivity growth into technical change and technical efficiency change. Empirical results show East Asian countries led the world in productivity growth, mainly because their technical efficiency gain was so much faster than that of other countries. East Asian countries also registered rapid technical change, which was comparable to that of the G6 countries after the late 1980s. The results provide evidence that negate the hypothesis that East Asian growth was mostly input-driven and unsustainable.

Suggested Citation

  • Sangho Kim & Young Hoon Lee, 2006. "The productivity debate of East Asia revisited: a stochastic frontier approach," Applied Economics, Taylor & Francis Journals, vol. 38(14), pages 1697-1706.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:14:p:1697-1706
    DOI: 10.1080/00036840500426884
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    Cited by:

    1. Maria Baquero Forero & Takanori Ida & Toshifumi Kuroda, 2015. "Institutions and Cultural Heterogeneity as Determinants of National Income: A Random-coefficients Stochastic Frontier Model," Review of Development Economics, Wiley Blackwell, vol. 19(3), pages 710-724, August.
    2. Tenaw, Dagmawe, 2025. "Green and traditional productivity growth with natural capital: The role of resource depletion, environmental damages and sectoral composition," Resources Policy, Elsevier, vol. 103(C).
    3. Robin C. Sickles & Jiaqi Hao & Chenjun Shang, 2014. "Panel data and productivity measurement: an analysis of Asian productivity trends," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 12(3), pages 211-231, August.
    4. Sickles, Robin C. & Hao, Jiaqi & Shang, Chenjun, 2015. "Panel Data and Productivity Measurement," Working Papers 15-018, Rice University, Department of Economics.
    5. Sangho Kim & Mazlina Shafi'i, 2009. "Factor Determinants of Total Factor Productivity Growth in Malaysian Manufacturing Industries: a decomposition analysis," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 23(1), pages 48-65, May.
    6. Rachida El Mehdi & Christian M. Hafner, 2021. "Panel Stochastic Frontier Analysis with Dependent Error Terms," International Econometric Review (IER), Econometric Research Association, vol. 13(2), pages 24-40, June.
    7. Seung Ahn & Young Lee & Peter Schmidt, 2007. "Stochastic frontier models with multiple time-varying individual effects," Journal of Productivity Analysis, Springer, vol. 27(1), pages 1-12, February.
    8. Sangho Kim & Donghyun Park & Jong-Ho Park, 2009. "Productivity Growth in Different Firm Sizes in the Malaysian Manufacturing Sector: An Empirical Investigation," ADB Economics Working Paper Series 176, Asian Development Bank.
    9. Sangho Kim, 2014. "Estimating Productivity Growth In The Korean Economy Without Restrictive Assumptions," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 520-532, April.
    10. Lee, Young Hoon, 2010. "Group-specific stochastic production frontier models with parametric specifications," European Journal of Operational Research, Elsevier, vol. 200(2), pages 508-517, January.
    11. Heru Margono & Subhash Sharma & Kevin Sylwester & Usama Al-Qalawi, 2009. "Technical efficiency and productivity analysis in Indonesian provincial economies," Applied Economics, Taylor & Francis Journals, vol. 43(6), pages 663-672.
    12. W. R. Garside, 2012. "Japan’s Great Stagnation," Books, Edward Elgar Publishing, number 14624, June.
    13. Nadide Gülbay Yiğiteli & Devran Şanlı, 2024. "Decomposition of total factor productivity growth in Türkiye regions: a panel stochastic frontier approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 14(2), pages 275-300, June.

    More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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