Productivity growth of East Asia economies' manufacturing: A decomposition analysis

Abstract

Applying a stochastic production frontier to sector-level data within manufacturing, this paper examines total factor productivity (TFP) growth for seven East Asian economies during 1963-98, using both single country and cross-country regressions. The analysis focuses on the trend in technological progress (TP) and technical efficiency change (TEC), and the role of productivity change in economic growth. The empirical results reveal that although input factor accumulation is still the main source for East Asian economies' growth, TFP growth is accounting for an increasing and important proportion of output growth, among which the improved TEC plays a crucial role in productivity growth.