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Productivity and Technical Change: The Case of Taiwan

Author

Listed:
  • R. Fare

    (Southern Illinois Univ. at Carbondale)

  • Shawna Grosskopf

    (Southern Illinois Univ. at Carbondale)

  • W-F Lee

Abstract

"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
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    References listed on IDEAS

    as
    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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