Decomposing Total Factor Productivity Growth in Manufacturing and Services

Asian Development Review, Vol. 34, No. 1, pp. 88–115, 2017

28 Pages Posted: 10 Mar 2017

Date Written: March 7, 2017

Abstract

Using the World Input–Output Database, this paper calculates total factor productivity (TFP) growth for a sample of 40 economies during the period 1995–2009 to show that TFP growth in Asian economies has been relatively strong. In a number of Asian economies, TFP growth in services has outpaced that in manufacturing. This paper presents a novel structural decomposition of TFP growth and shows that the main drivers of aggregate productivity growth, as well as differences in productivity growth between services and manufacturing, have been changing factor requirements. These effects tend to offset the negative productivity effect of a declining ratio of value added to gross output.

Keywords: Manufacturing and Services, Structural Decomposition, Total Factor Productivity

JEL Classification: O40, O57

Suggested Citation

Foster-McGregor, Neil and Verspagen, Bart, Decomposing Total Factor Productivity Growth in Manufacturing and Services (March 7, 2017). Asian Development Review, Vol. 34, No. 1, pp. 88–115, 2017, Available at SSRN: https://ssrn.com/abstract=2930451

Neil Foster-McGregor (Contact Author)

UNU-MERIT ( email )

Keizer Karelplein 19
Maastricht, 6211TC
Netherlands

Bart Verspagen

University of Maastricht and UNU-MERIT ( email )

P.O. Box 616
Maastricht, 6200MD
Netherlands

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
64
Abstract Views
452
rank
409,302
PlumX Metrics