IDEAS home Printed from https://ideas.repec.org/p/wpa/wuwpem/0410010.html
   My bibliography  Save this paper

On the Anatomy of Productivity Growth: A Decomposition of the Fisher Ideal TFP Index

Author

Listed:
  • Timo Kuosmanen

    (Wageningen University, Environmental Economics & Natural Resources Group)

  • Timo Sipiläinen

    (Agrifood Research Finland, MTT Economic Research)

Abstract

Decompositions of productivity indices contribute to our understanding of what drives the observed productivity changes by providing a detailed picture of their constituents. This paper presents the most comprehensive decomposition of total factor productivity (TFP) to date. Starting from the Fisher ideal TFP index, we systematically isolate the productivity effects of changes in production technology, technical efficiency, scale efficiency, allocative efficiency, and the market strength. The three efficiency components further decompose into input- and output-side effects. The proposed decomposition is illustrated with an empirical application to a sample of 459 Finnish farms over period 1992-2000.

Suggested Citation

  • Timo Kuosmanen & Timo Sipiläinen, 2004. "On the Anatomy of Productivity Growth: A Decomposition of the Fisher Ideal TFP Index," Econometrics 0410010, EconWPA.
  • Handle: RePEc:wpa:wuwpem:0410010
    Note: Type of Document - pdf; pages: 42
    as

    Download full text from publisher

    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/em/papers/0410/0410010.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Fare, Rolf & Grosskopf, Shawna & Lovell, C A Knox, 1983. " The Structure of Technical Efficiency," Scandinavian Journal of Economics, Wiley Blackwell, vol. 85(2), pages 181-190.
    2. Diewert, Erwin, 2007. "Index Numbers," Economics working papers diewert-07-01-03-08-17-23, Vancouver School of Economics, revised 31 Jan 2007.
    3. Rolf Färe & Shawna Grosskopf, 2000. "Research Note. Decomposing Technical Efficiency with Care," Management Science, INFORMS, vol. 46(1), pages 167-168, January.
    4. Bjurek, Hans, 1996. " The Malmquist Total Factor Productivity Index," Scandinavian Journal of Economics, Wiley Blackwell, vol. 98(2), pages 303-313, June.
    5. Balk, Bert M., 2004. "Decompositions of Fisher indexes," Economics Letters, Elsevier, vol. 82(1), pages 107-113, January.
    6. Balk, Bert M, 1993. "Malmquist Productivity Indexes and Fisher Ideal Indexes: Comment," Economic Journal, Royal Economic Society, vol. 103(418), pages 680-682, May.
    7. Daron Acemoglu, 2002. "Directed Technical Change," Review of Economic Studies, Oxford University Press, vol. 69(4), pages 781-809.
    8. Basu, Susanto & Fernald, John G, 1997. "Returns to Scale in U.S. Production: Estimates and Implications," Journal of Political Economy, University of Chicago Press, vol. 105(2), pages 249-283, April.
    9. Fare, Rolf & Grosskopf, Shawna, 1992. "Malmquist Productivity Indexes and Fisher Ideal Indexes," Economic Journal, Royal Economic Society, vol. 102(410), pages 158-160, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ghelfi, Rino & Bertazzoli, Aldo & Marchi, Alan & Rivaroli, Sergio & Samoggia, Antonella, 2010. "Inputs use in the agriculture of Emilia-Romagna: farm comparison through the Total Factor Productivity (TFP) index," 120th Seminar, September 2-4, 2010, Chania, Crete 109322, European Association of Agricultural Economists.
    2. Timo Kuosmanen & Timo Sipiläinen, 2009. "Exact decomposition of the Fisher ideal total factor productivity index," Journal of Productivity Analysis, Springer, vol. 31(3), pages 137-150, June.

    More about this item

    Keywords

    index numbers and aggregation; Total Factor Productivity (TFP) measurement; Fisher ideal index; Malmquist index; decompositions; agriculture;

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpem:0410010. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (EconWPA). General contact details of provider: https://econwpa.ub.uni-muenchen.de .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.