Total Factor Productivity and Outward Orientation in Taiwan: What is the Nature of the Relationship?

Economic Efficiency and Productivity Growth in the Asia-Pacific Region, Tsu-Tan Fu, Cliff Huang, Knox Lovell, eds., Edward Elgar Publishing

Posted: 11 Feb 1999

See all articles by Sebastien Dessus

Sebastien Dessus

World Bank - West Bank and Gaza Resident Mission

Multiple version iconThere are 2 versions of this paper

Abstract

Recent applied literature finds a correlation between total factor productivity (TFP) growth and increased outward orientation, but the nature of the theoretical relationship remains controversial. In this paper, we test econometrically several specifications using time series for Taiwan to elucidate the question. We find strong support for the view that imports of technology, in a context of decreasing returns to imitation, and the removal of domestic distortions, through its impact on the labor market's allocative efficiency, have played a major role in Taiwan's TFP growth. Conversely, export promotion, per se, did not affect TFP growth significantly, but through its indirect contribution to financing imports.

JEL Classification: C22, F43, O47

Suggested Citation

Dessus, Sebastien, Total Factor Productivity and Outward Orientation in Taiwan: What is the Nature of the Relationship?. Economic Efficiency and Productivity Growth in the Asia-Pacific Region, Tsu-Tan Fu, Cliff Huang, Knox Lovell, eds., Edward Elgar Publishing. Available at SSRN: https://ssrn.com/abstract=147267

Sebastien Dessus (Contact Author)

World Bank - West Bank and Gaza Resident Mission ( email )

P.O. BOX 54842
Jerusalem
Israel
+972 2 236 65 49 (Phone)
+972 2 236 65 43 (Fax)

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