MEASUREMENT AND DETERMINANTS OF MULTI‐FACTOR PRODUCTIVITY: A SURVEY OF LITERATURE. (27th February 2020)

• Record Type: Journal Article
• Authors: Ahmed, Tauqir; Bhatti, Arshad Ali
• Is Part Of: Journal of economic surveys. Volume 34:Number 2(2020)
• Page Start: 293
• Page End: 319
• Publication Date: 2020-02-27
• Subjects: Frontier technique -- Growth accounting -- Index numbers method -- MFP determinants -- MFP measurement -- Multi‐factor productivity; Economics -- Periodicals; 330
• DOI: 10.1111/joes.12360
• Languages: English
• ISSNs: 0950-0804

Abstract

Abstract: This paper surveys and synthesizes fast‐growing literature on the measurement and determinants of multi‐factor productivity (MFP). We identify three strands of the literature to measure MFP: the first is growth accounting, which decomposes observed economic growth into the contribution of factor inputs and technological change, called the Solow Residual; the second is index number methods, accompanied by frontier techniques; the third is growth regressions and econometric methods used to estimate productivity across countries and regions. We keep our focus on assessing the major strengths and weaknesses of commonly used methods for MFP measurement and categorize existing literature on the determinants of MFP growth into macroeconomic and institutional factors. We attempt to provide a reassessment and thematic survey of literature on the drivers of aggregate productivity, enabling policymakers to formulate effective economic policy.