Productivity, Efficiency, Scale Economies and Technical Change: A New Decomposition Analysis

Jiro Nemoto and Mika Goto

No 11373, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper aims to examine the productivity change of the Japanese economy using the data pertaining to the 47 prefectures during the period 1981-2000. The decomposition analysis of the Hicks-Moorsteen-Bjurek productivity index is conducted to explore the sources of the productivity change. In summary, technical change and efficiency change are two of the most important components driving procyclical productivity. We find that their relative importance varies over periods. Supply shocks captured by technical change component caused upturns in productivity in the mid and late 80s and in 1999 and 2000. Supply shocks also caused downturns in the early and mid 90s. On the other hand, demand shocks captured by the efficiency change component drove upturns of productivity in 1984, 1990, and 1996 when supply shocks were not detected.

JEL-codes: C43 D24 O47 (search for similar items in EconPapers)
Date: 2005-05
New Economics Papers: this item is included in nep-eff
Note: PR
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Citations: View citations in EconPapers (26)

Published as Nemoto, Jiro and Mika Goto. "Productivity, Efficiency, Scale Economies And Technical Change: A New Decomposition Analysis Of TFP Applied To The Japanese Prefectures," Journal of the Japanese and International Economies, 2005, v19(4,Dec), 617-634.

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