Technical change and total factor productivity growth: a study of Singapore's manufacturing industries

The paper focuses on the difference between the dual rate of technical chan ge and the total factor productivity growth (TFPG). It estimates directly t he dual rate of technical change from an integrated model that describes th e cost structure and equilibrium condition of Singapore's manufacturing ind ustries. It then calculates TFPG using the conventional productivity accoun ting approach. By showing the difference between the two measures, it is de monstrated that the non-parametric calculated TFPG cannot be interpreted wh olly as a cost saving technical change since the preconditions required in the calculation of TFPG are not met. It is found that the majority of Singa pore's manufacturing industries exhibit, on the one hand, substantial incre asing returns to scale and, on the other hand, no significant technical cha nge. However, the largest and fastest growing industries such as Electronic Products and Components show both significant cost-saving technical progre ss and decreasing returns to scale.