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Factor Substitution and Productivity in New Zealand
Author(s) -
Steenkamp Daan
Publication year - 2018
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/1475-4932.12372
Subject(s) - total factor productivity , elasticity of substitution , economics , substitution (logic) , constant elasticity of substitution , productivity , technical change , capital (architecture) , elasticity (physics) , econometrics , partial productivity , production (economics) , labour economics , factors of production , microeconomics , macroeconomics , computer science , materials science , archaeology , programming language , composite material , history
This paper produces aggregate and industry estimates of total factor productivity ( TFP ) for New Zealand. TFP is estimated based on constant elasticity of substitution ( CES ) production functions that permit varying assumptions about factor augmentation and that allow for industry‐specific values of the elasticity of substitution between inputs. The CES approach simultaneously explains changes in labour share and output over time, and provides estimates of the contribution of capital and labour to productivity in New Zealand. The results suggest that negative capital‐augmenting technical change in several industries has weighed on productivity in New Zealand.