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Technical Efficiency and U.S. Manufacturing Productivity Growth

Author

Listed:
  • Jeffrey I. Bernstein

    (Carleton University and NBER)

  • Theofanis P. Mamuneas

    (University of Leicester and University of Cyprus)

  • Panos Pashardes

    (University of Cyprus)

Abstract

This paper establishes that new inputs increase technical efficiency levels for U.S. manufacturing. Over the period 1950-1998, intermediate inputs exhibited higher rates of efficiency growth than labor and capital. Efficiency-adjusted productivity growth annually averaged 0.4 percentage points above measured growth. The gap between efficiency-adjusted and measured productivity growth arises from aggregating inputs using observed, and not efficiency-adjusted, cost share weights in the calculation of measured growth. Specifically, the decline in efficiency-adjusted material cost shares, compared to the measured shares, coupled with the comparatively high material input growth rate, was the main source of the productivity gap. © 2004 President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Suggested Citation

  • Jeffrey I. Bernstein & Theofanis P. Mamuneas & Panos Pashardes, 2004. "Technical Efficiency and U.S. Manufacturing Productivity Growth," The Review of Economics and Statistics, MIT Press, vol. 86(1), pages 402-412, February.
  • Handle: RePEc:tpr:restat:v:86:y:2004:i:1:p:402-412
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    Cited by:

    1. Bernstein Jeffrey I. & Mamuneas Theofanis P., 2007. "Irreversible Investment, Capital Costs and Productivity Growth: Implications for Telecommunications," Review of Network Economics, De Gruyter, pages 1-22.
    2. Jeffrey Bernstein & Theofanis Mamuneas, 2008. "Public infrastructure, input efficiency and productivity growth in the Canadian food processing industry," Journal of Productivity Analysis, Springer, pages 1-13.
    3. Elena Ketteni & Theofanis Mamuneas & Panos Pashardes, 2013. "ICT and Energy Use: Patterns of Substitutability and Complementarity in Production," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 7(1), pages 63-86, June.
    4. Bernstein, Jeffrey I. & Mamuneas, Theofanis P., 2006. "R&D depreciation, stocks, user costs and productivity growth for US R&D intensive industries," Structural Change and Economic Dynamics, Elsevier, vol. 17(1), pages 70-98, January.
    5. Supawat Rungsuriyawiboon & Spiro Stefanou, 2008. "The dynamics of efficiency and productivity growth in U.S. electric utilities," Journal of Productivity Analysis, Springer, pages 177-190.
    6. Supawat Rungsuriyawiboon & Spiro Stefanou, 2008. "The dynamics of efficiency and productivity growth in U.S. electric utilities," Journal of Productivity Analysis, Springer, pages 177-190.

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