Productivity and Technical Change: The Case of Taiwan
"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.
|Date of creation:||29 Sep 1995|
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- 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.
- 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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