Malmquist indices of total factor productivity changes in the Australian construction industry

Construction is an important industry and forms a vital part of national economics in the world. Factors affecting the productivity of the construction industry should be measured appropriately to reflect its development situation and economic performance. The Malmquist index method with a novel decomposition technique is employed to estimate the total factor productivity of the Australian construction industry during the period 1990-2007 and to analyse the factors affecting the technological change in the industry. Research results exemplified by two input variables and one output variable elaborate how construction technology, pure technical efficiency and scale economy take effect in the change of construction productivity. In addition, based on temporal and spatial comparisons, the analysis for construction productivities reveals their changes over time and across the country. Proposals and recommendations are expected to be beneficial for policy making and strategic decisions to improve the performance of the Australian construction industry.

Energy productivity and total-factor productivity in the Australian construction industry

There is urgent need to consider energy consumption when measuring total-factor productivity in the construction industry. This paper adopts the Malmquist index method to investigate the factors affecting the energy productivity of the Australian construction industry and compares them with those decomposed from the total-factor productivity. An input-oriented distance function and a contemporaneous benchmark technology are employed to develop the data envelopment analysis models. The Malmquist productivity index is decomposed into the technological change, pure technical efficiency change and activity effect to gain comprehensive insights into changes of construction productivity in the Australian states and territories over the past two decades. Research results show that both energy productivity and total-factor productivity improved in Australia, particularly related to technological development. The pure technical efficiency and activity indices changed slightly over time or across regions. This study demonstrates that there exists a linkage between energy productivity and total-factor productivity through their technological and technical efficiency changes. The Australian construction industry could enhance these two productivities by introducing advanced technologies and implementing them efficiently.

Total Factor Productivity and Monetary Policy: Evidence from Conditional Volatility

This paper empirically assesses whether monetary policy affects real economic activity through its affect on the aggregate supply side of the macroeconomy. Analysts typically argue that monetary policy either does not affect the real economy, the classical dichotomy, or only affects the real economy in the short run through aggregate demand new Keynesian or new classical theories. Real business cycle theorists try to explain the business cycle with supply-side productivity shocks. We provide some preliminary evidence about how monetary policy affects the aggregate supply side of the macroeconomy through its affect on total factor productivity, an important measure of supply-side performance. The results show that monetary policy exerts a positive and statistically significant effect on the supply-side of the macroeconomy. Moreover, the findings buttress the importance of countercyclical monetary policy as well as support the adoption of an optimal money supply rule. Our results also prove consistent with the effective role of monetary policy in the Great Moderation as well as the more recent rise in productivity growth.

Total Factor Productivity, Human Capital and Outward Orientation: Differences by Stage of Ddevelopment and Geographic Regions

Do openness and human capital accumulation promote economic growth? While intuition argues yes, the existing empirical evidence provides mixed support for such assertions. We examine Cobb-Douglas production function specifications for a 30-year panel of 83 countries representing all regions of the world and all income groups. We estimate and compare labor and capital elasticities of output per worker across each of several income and geographic groups, finding significant differences in production technology. Then we estimate the total factor productivity series for each classification. Using determinants of total factor productivity that include, among many others, human capital, openness, and distortion of domestic prices relative to world prices, we find significant differences in results between the overall sample and sub-samples of countries. In particular, a policy of outward orientation may or may not promote growth in specific country groups. even if geared to reducing price distortion and increasing openness. Human capital plays a smaller role in enhancing growth through total factor productivity.

The Effects of Trade Orientation and Human Capital on Total Factor Productivity

We study the effects of trade orientation and human capital on total factor productivity for a pooled cross-section, time-series sample of developed and developing countries. We first estimate total factor productivity from a parsimonious specification of the aggregate production function involving output per worker, capital per worker, and the labor force, both with and without the stock of human capital. Then we consider a number of potential determinants of total factor productivity growth including several measures of trade orientation as well as a measure of human capital. We find that a high degree of openness benefits total factor productivity and that human capital contributes to total factor productivity only after our measure of openness passes some threshold level. Before that threshold, increases in human capital actually depress total factor productivity. Finally, we also consider the issue of convergence of real GDP per worker and total factor productivity, finding more evidence of convergence for the latter than for the former.

Explaining Economic Growth: Factor Accumulation, Total Factor Productivity Growth, and Production Efficiency Improvement

This paper examines cross-country patterns of economic growth by estimating a stochastic frontier production function for 80 developed and developing countries and decomposing output change into factor accumulation, total factor productivity growth, and production efficiency improvement. In addition, this paper incorporates the quality of inputs in analyzing output growth, where the productivity of capital depends on its average age, while the productivity of labor depends on its average level of education. Our growth decomposition involves five geographic regions - Africa, East Asian, Latin America, South Asia, and the West. Factor growth, especially capital accumulation, generally proves much more important than either the improved quality of factors or total factor productivity growth in explaining output growth. The quality of capital positively and significantly affects output growth in all groups. The quality of labor, however, only possesses a positive and significant effect on output growth in Africa, East Asia, and the West. Labor quality owns a negative and significant effect in Latin America and South Asia.

Total factor productivity and the spillover hypothesis: some new evidence

In this paper I test the spillover hypothesis of the endogenous growth literature on a sample of manufacturing firms in Italy, 1989–1994, using a new approach based on the Malmquist index. First, I measure the productivity growth registered by the high- and non-high-tech firms computing the Malmquist index with DEA. I decompose it into technical change and technical efficiency change. Then I test whether the technical change registered by high-tech firms affects productivity growth of non-high-tech firms, after controlling for factors which can potentially affect productivity growth.

Public capital and total factor productivity:new evidence from the Italian regions, 1970-98

This paper analyses the relationship between industrial total factor productivity and public capital across the 20 Italian administrative regions. It adds upon the existing literature in a number of ways: it analyses a longer period (1970-98); it allows for the role of human capital accumulation; it tests for the existence of a long-run relationship between total factor productivity and public capital (through previously suggested panel techniques) and for weak exogeneity of public capital; and it assesses the significance of public capital within a non-parametric set-up based on the Free Disposal Hull. The results confirm that public capital has a significant impact on the evolution of total factor productivity, particularly in the Southern regions. This impact is mainly ascribed to the core infrastructures (road and airports, harbours, railroads, water and electricity, telecommunications). Also, core infrastructures are weakly exogenous. © 2005 Regional Studies Association.

Efficiency and total factor productivity changes of Malaysian commercial banks

This paper analyses the efficiency of Malaysian commercial banks between 1996 and 2002 and finds that while the East Asian financial crisis caused a short-term increase in efficiency in 1998 primarily due to cost-cutting, increases in non-performing loans after the crisis caused a more sustained decline in bank efficiency. It is also found that mergers, fully Islamic banks, and conventional banks operating Islamic banking windows are all associated with lower efficiency. The paper estimates suggest mild decreasing returns to scale, and an average productivity change of 2.37% that is primarily attributable to technical change, which has nonetheless declined over time. Finally, while Islamic banks have been moderately successful in developing new products and technologies, the results suggest that the potential for Islamic banks to overcome their relative inefficiency is limited.