Total Factor Productivity Growth, Technological Progress and Technical Efficiency Change: Dimensions of Productivity Change in Yugoslavia, 1965-78

The usefulness of decomposing total factor productivity change into the 2 distinct elements of technical progress and technical efficiency is proposed. Previously, important productivity gains and losses attributable to changes in efficiency with which a technology is applied to production have been...

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Bibliographic Details
Published in:The Economic journal (London) 1982-12, Vol.92 (368), p.920-936
Main Authors: Nishimizu, Mieko, Page, John M.
Format: Article
Language:English
Subjects:
Changes
Commercial production
Economic models
Economic theory
Economically efficient production
Efficiency
Emerging technology
Estimation methods
Index numbers
Production efficiency
Production estimates
Production factors
Production functions
Productive efficiency
Productivity
Statistical analysis
Technological
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Summary:The usefulness of decomposing total factor productivity change into the 2 distinct elements of technical progress and technical efficiency is proposed. Previously, important productivity gains and losses attributable to changes in efficiency with which a technology is applied to production have been neglected. While the 2 elements are not entirely separable, this approach advantageously combines the best of these 2 views of production theory. Review of the Yugoslavian economy since 1970 illustrates the benefits of this analysis. This paper finds that changes in technical efficiency dominated technological progress from 1965 to 1970. From 1970 to 1975, deterioration in efficiency acutely affected the economy. In several sectors, the poor performance is indicative of failures in investment planning and implementation of new technology. In areas that have experienced increased efficiency, the success is primarily due to acquisition of foreign technology.
ISSN:0013-0133
1468-0297
DOI:10.2307/2232675