Measuring Productivity Growth in the Bahraini Agriculture and Fisheries Sector

The main objective of this study is to measure and analyze one of the major components of economic performance, multifactor productivity (MFP) growth rate adjusted for economies of scale, and to measure and analyze the growth rate of partial (input-specific) productivity in the Bahraini Agriculture and Fisheries Sector (primary sector) over the time period 1980-2002. A dual cost measure of multifactor productivity growth was developed to obtain a highly interpretable measure of economic performance. Exploiting recent developments in dualcost theory, a well-defined method for empirical estimation has been established. This approach explicitly takes into account the impact of non-neutral technological change and economies of scale that may occur in the long-run production process. An empirical model of multifactor productivity was derived as an application of this dual-cost analysis. The translog long-run cost function was employed to estimate the multifactor productivity growth, technological change, the bias of the technological change, and input-specific (partial) productivity in Bahrain primary sector. The findings of this study show that the presently structured primary sector, in general, have experienced a relatively low productivity growth rate, an annual average of 1.7%. The reason behind this low performance could be the presence of a number of sub-optimal operations with significant low rate of multifactor productivity growth. However, the maximum level of multifactor productivity growth rate was 17.5% in 1994, just before the civil unrest era.