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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
Registered author(s):

    "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.

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    Paper provided by EconWPA in its series GE, Growth, Math methods with number 9509001.

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    Length: 33 pages
    Date of creation: 29 Sep 1995
    Date of revision:
    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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    1. Binswanger, Hans P., 1973. "The Measurement Of Technical Change Biases With Many Factors Of Production," Staff Papers 14205, University of Minnesota, Department of Applied Economics.
    2. Diewert, W E, 1980. "Capital and the Theory of Productivity Measurement," American Economic Review, American Economic Association, vol. 70(2), pages 260-67, May.
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