S. Kim et G. Han, A decomposition of total factor productivity growth in Korean manufacturing industries: A stochastic frontier approach, J PROD ANAL, 16(3), 2001, pp. 269-281
This paper applies a stochastic frontier production model to Korean manufac
turing industries, to decompose the sources of total factor productivity (T
FP) growth into technical progress, changes in technical efficiency, change
s in allocative efficiency, and scale effects. Empirical results based on d
ata from 1980-1994 show that productivity growth was driven mainly by techn
ical progress, that changes in technical efficiency had a significant posit
ive effect, and that allocative efficiency had a negative effect. This stud
y suggests that specific guidelines are required to promote productivity in
each industry, and provides additional insight into understanding the rece
nt debate on TFP growth in Korean manufacturing.