Measuring Productivity Growth in Asia: Do Market Imperfections Matter?
47 Pages Posted: 24 Nov 2003
Date Written: October 7, 2003
Recent research reports contradictory estimates of productivity growth for the newly industrialized economies (NIEs) of Asia. In particular, estimates using real factor prices find relatively rapid TFP growth; estimates using quantities of inputs and output find relatively low TFP growth. The difference is particularly notable for Singapore, where the difference is about 2-1/4 percentage-points per year. We show that about 2/3 of that difference reflects differences in estimated capital payments. We argue that these differences reflect economically interesting imperfections in output and capital markets, including sizeable economic profits in Singapore and government-directed credit. We derive a measure of technology growth, corrected for the imperfections that we quantify.
Keywords: Asia, total factor productivity, Singapore, directed credit, growth accounting
JEL Classification: O47, F43, E44
Suggested Citation: Suggested Citation