Premium
MEASUREMENT AND DETERMINANTS OF MULTI‐FACTOR PRODUCTIVITY: A SURVEY OF LITERATURE
Author(s) -
Ahmed Tauqir,
Bhatti Arshad Ali
Publication year - 2020
Publication title -
journal of economic surveys
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.657
H-Index - 92
eISSN - 1467-6419
pISSN - 0950-0804
DOI - 10.1111/joes.12360
Subject(s) - economics , productivity , total factor productivity , growth accounting , econometrics , solow residual , categorization , strengths and weaknesses , technological change , index (typography) , macroeconomics , public economics , computer science , philosophy , epistemology , artificial intelligence , world wide web
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.