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Estimation of technical change and TFP growth based on observable technology shifters

Almas Heshmati () and Masoomeh Rashidghalam ()
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Masoomeh Rashidghalam: University of Tabriz

Journal of Productivity Analysis, 2020, vol. 53, issue 1, No 3, 36 pages

Abstract: Abstract This paper models and estimates total factor productivity (TFP) growth parametrically. The model is a generalization of the traditional production function model where technology is represented by a time trend. It decomposes TFP growth into an unobservable time trend induced technical change, scale economies and an observable technology shifter index’s components. The empirical results are based on unbalanced panel data at the global level for 190 countries observed over the period 1996–2013. It uses a number of exogenous growth factors in modeling four technology shifter indices to explore development infrastructure, finance, technology and human development determinants of TFP growth. Our results show that unobservable technical change remains the most important component of TFP growth. Our findings also show that technical changes and TFP growth are unexpectedly negative across all country income groups and years.

Keywords: Technical change; Total factor productivity growth; Technology indicators; Technology shifters (search for similar items in EconPapers)
JEL-codes: C33 C43 D24 O33 O47 O50 (search for similar items in EconPapers)
Date: 2020
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Related works:
Working Paper: Estimation of Technical Change and TFP Growth based on Observable Technology Shifters (2017) Downloads
Working Paper: Estimation of Technical Change and TFP Growth Based on Observable Technology Shifters (2016) Downloads
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DOI: 10.1007/s11123-019-00558-5

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