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Multifactor productivity growth and the Australian mining sector
Author(s) -
Syed Arif,
Grafton R. Quentin,
Kalirajan Kaliappa,
Parham Dean
Publication year - 2015
Publication title -
australian journal of agricultural and resource economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.683
H-Index - 49
eISSN - 1467-8489
pISSN - 1364-985X
DOI - 10.1111/1467-8489.12122
Subject(s) - productivity , multifactor productivity , boom , economics , incentive , resource (disambiguation) , demographic economics , total factor productivity , economic growth , environmental science , computer network , environmental engineering , computer science , microeconomics
A commonly used, but unadjusted, measure of Australian mining multifactor productivity ( MFP ) fell by about one‐third over the first decade of the mining boom, coinciding with very large increases in resource prices. Using growth accounting methods and our own adjustments, based on energy use and capital‐output lags to account for depletion effects we find (i) the Australian annual average MFP growth in mining was 2.5 per cent a year between 1985–1986 and 2009–2010 compared to −0.65 per cent for the unadjusted measure and (ii) productivity growth was positive in the 2000s, albeit at a lower rate than in the 1990s. Our adjusted MFP growth measures at a state level and subsector level are greater than unadjusted productivity measures. In a complementary study using an econometric decomposition of mining MFP at a state level, we find no statistically significant effect of technological change on MFP growth in the sector, but positive and statistically significant effects of technical efficiency and scale over the period 1990–1991 to 2009–2010. Our results do not support specific policy interventions to increase productivity growth in the mining sector beyond appropriate incentives for resource exploration including the provision of precompetitive resource data.