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Sources of TFP Growth: Occupational Choice and Financial Deepening

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Listed author(s):
  • Hyeok Jeong
  • Robert M. Townsend

Abstract

We develop a method of growth accounting based on the integrated use of transitional growth models and micro data. We decompose total factor productivity (TFP) growth into the occupational-shift effect, financial-deepening effect, capital-heterogeneity effect, and sectoral-Solow-residuals. Applying this method to Thailand, which experienced rapid growth with enormous structural changes between 1976 and 1996, we find that 73 percent of TFP growth is explained by occupational shifts and ?nancial deepening, without presuming exogenous technical progress. Expansion of credit is a major part. We also show the role of endogenous interaction between factor price dynamics and the wealth distribution for TFP.

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Paper provided by Institute of Economic Policy Research (IEPR) in its series IEPR Working Papers with number 05.28.

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Length: 32 pages
Date of creation: Mar 2005
Date of revision: May 2005
Publication status: Published in Review of Economics, March 1999, pages 1-23
Handle: RePEc:scp:wpaper:05-28
Contact details of provider: Phone: (213) 740-3521
Fax: (213) 740-3522
Web page: http://www.usc.edu/dept/LAS/economics/IEPR/

More information through EDIRC

Keywords: Total Factor Productivity; Occupation Choice; Financial Deepening;

Other versions of this item:

Find related papers by JEL classification:
  • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
  • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
  • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
  • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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References listed on IDEAS
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