Asia's Productivity Performance and Potential at the Turn of the Century: An international Perspective (original) (raw)
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A paper presented at, 2008
As the studies of Krugman (1994), Young (1994), and Lau and Kim (1994) showed, the East Asian economic miracle may be characterized as `input-led' growth. However, both the stagnation in investment and the decrease in average working hours combined with a decrease in the fertility rate require a productivity surge for renewed, sustainable growth in East Asia. The purpose of our study is to identify the sources of economic growth based on a KLEMS model for Japan and the Republic of Korea, which experienced a "Lost Decade" and a financial crisis in 1997-1998, respectively. We report estimates of multifactor productivity in the market economy of Japan and Korea based on the dataset of a 72-industry classification following EU KLEMS project guidelines. We also identify the contributions of ICT assets and resource reallocations in two economies. Both economies have strong ICT-producing sectors but relatively weaker ICT-usage effects. Lower productivity in service industries due to excessive regulations and lack of competition in public service sectors seem to have worked against enhancing ICT-usage effects and finding renewed sustainable growth paths. The resource reallocation effects of capital input in both Japan and Korea were either negligible or insignificant, while those of labor input (the labor shift from lower wage industries to higher wage industries) were positive and significant. Therefore, a series of productivity-enhancing policies designed to promote reallocation of capital input seems crucial for both economies to resume sustainable growth paths.
Productivity and economic growth in East Asia: innovation, efficiency and accumulation
Japan and the World Economy, 2002
Sources of growth in East Asia have been a controversial subject in the literature. This necessitates more empirical studies to see whether there is more convergence to a particular view of the sources of growth. This study provides a comprehensive examination of sources of growth that allows one to decompose total factor productivity growth, separating out technical efficiency changes from technological progress. This paper applies a varying coefficients frontier production function model to data from 20 manufacturing sectors at the 3-digit SIC level to examine the sources of growth in four East Asian economies. The economies are Hong Kong, Singapore, Japan and South Korea, and the period covered is 1987-93. We find that while there is ample evidence of the importance of increasing inputs in growth, and there is some support for technical efficiency change, or catching up to the frontier over this period, there is weak or even negative evidence for the role of technological progress, measured as a shift in the estimated production frontier.
Productivity, Efficiency and Economic Growth: East Asia and the Rest of the World
The Journal of Developing Areas, 2004
This study compares the sources of growth in East Asia with the rest of the world, using a methodology that allows one to decompose total factor productivity (TFP) growth into technical efficiency changes (catching up) and technological progress. It applies a varying coefficients frontier production function model to aggregate data for the period 1970-1990, for a sample of 45 developed and developing countries. Our results are consistent with the view that East Asian economies were not outliers in terms of TFP growth. Of the high-performing East Asian economies, our methodology identifies South Korea as having the highest TFP growth, followed by Singapore, Taiwan and Japan. Our methodology also allows us to separately estimate technical efficiency change, which is a component of TFP growth, and we find that, in general, the estimated technical efficiency of the high-performing East Asian economies was not out of line with the rest of the world.
Globalization, Structural Change and Productivity Growth in the Emerging Countries
The paper examines the sources of labor reallocation or structural change, and measures and empirically evaluates the contribution of structural change to labor productivity growth (LPG). The paper also evaluates the relative contributions of human and physical capital to LPG. The paper found that changing final demand is the most crucial factor in labor reallocation in India. In the PRC, this and changes in technology are factors of labor allocation. The regression analysis confirmed that structural change, globalization, and human capital significantly contribute to LPG. Due to its prevailing structure, India is capable of leading global economic growth in the future, provided that certain necessary policies on human capital development, outward-oriented policies, and other conducive economic reform measures are taken. There is enough room for India to use manufacturing as a growth escalator, and for China to tap into services as a growth escalator to avoid the middle income trap.
Asia Pacific productivity development determinants
World Journal of Entrepreneurship, Management and Sustainable Development, 2017
Purpose The purpose of this paper is to measure the factors determining the productivity development in the Asia Pacific countries such as Malaysia, Indonesia, Singapore, Philippines, Thailand, China, Japan, Korea, India, Australia and New Zealand. Design/methodology/approach The extensive growth theory that is expressed as the decomposition of the contribution of changes in employment, physical capital, foreign direct investment (FDI), human capital (HC), telecommunications investment and total factor productivity (TFP) growth on the selected Asia-Pacific countries’ output growth is used in this study. In this respect, an annual time series data over the period 1970-2012 for the aforementioned variables are employed. Findings The study found that the FDI spillover effects through the TFP are considered as productivity-driven economic growth in which the FDI spillover effects have significant effect on the productivity growth of the majority of these countries. It should be noted th...
STRUCTURAL CHANGE AND PRODUCTIVITY GROWTH IN INDIA AND THE PEOPLE'S REPUBLIC OF CHINA
Globalization has significantly changed the composition and structure of emerging economies, which has in turn reallocated factors across various economic activities. In this context, this study examines the sources of labor reallocation or structural change, and measures and empirically evaluates the contribution of structural change to labor productivitygrowth (LPG) by controlling for indicators of economic globalization and types of human capital. The study also evaluates the relative contributions of human and physical capital to LPG. The study found that changing final demand is the most crucial factor in labor reallocation in India. In the PRC, this and changes in technology are factors of labor allocation. The regression analysis confirmed that structural change, globalization, and human capital significantly contribute to LPG. Due to its prevailing structure, India is capable of leading global economic growth in the future, provided that certain necessary policies on human capital development, outward-oriented policies, and other conducive economic reform measures are taken.