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Productivity and Technical Change: The Case of Taiwan


  • R. Fare

    (Southern Illinois Univ. at Carbondale)

  • Shawna Grosskopf

    (Southern Illinois Univ. at Carbondale)

  • W-F Lee


"Technical change" and "technical efficiency change" are two key factors to productivity growth that are associated with different sources; hence, different policies may be required to address them. Therefore, it is important to decompose productivity growth into these two components. Technical change may be further decomposed into output- and input-biases. These biases have impacts on factor income distribution and hence policy implications associated with them. It is therefore important to identify the output- and input-bias components of technical change and measure them empirically. In this paper, we explore the above issues for the disaggregate cases of 18 Taiwan manufacturing industries at the 2-digit level grouping during the period 1978-92. To pursue our goal we decompose the Malmquist total factor productivity (TFP) index into two components: technical change and technical efficiency change. Here, however, we further decompose the technical change component; in particular we define output bias, input bias and a magnitude term. In addition, we are able to identify the directions of the input biases.

Suggested Citation

  • R. Fare & Shawna Grosskopf & W-F Lee, 1995. "Productivity and Technical Change: The Case of Taiwan," GE, Growth, Math methods 9509001, EconWPA.
  • Handle: RePEc:wpa:wuwpge:9509001
    Note: Type of Document - WordPerfect 5.1 for DOS; prepared on IBM PC; to print on HP LaserJet 3 (1Mb); pages: 33; figures: none. binary WordPerfect file FTP'ed; see all of our working papers at

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    References listed on IDEAS

    1. Binswanger, Hans P, 1974. "The Measurement of Technical Change Biases with Many Factors of Production," American Economic Review, American Economic Association, vol. 64(6), pages 964-976, December.
    2. Diewert, W E, 1980. "Capital and the Theory of Productivity Measurement," American Economic Review, American Economic Association, vol. 70(2), pages 260-267, May.
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    Cited by:

    1. Kumar, Surender, 2004. "Decomposition of total factor productivity growth: A regional analysis of Indian industrial manufacturing growth," Working Papers 04/22, National Institute of Public Finance and Policy.
    2. repec:ind:nipfwp:22 is not listed on IDEAS
    3. Wong, Lawrence, 2001. "Measuring technological change in the U.S. motor carrier industry," Research in Transportation Economics, Elsevier, vol. 6(1), pages 25-54, January.
    4. repec:npf:wpaper:22 is not listed on IDEAS

    More about this item

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D9 - Microeconomics - - Micro-Based Behavioral Economics


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