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Measuring and Analyzing the Shares of Economic Growth Sources in the Mining Sector of Iran: A Neoclassical Growth Accounting Approach

Mahmood Mahmoudzadeh and Seyyed Ali Zeytoon Nejad Moosavian ()

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Abstract: The purpose of this study is to measure the Total Factor Productivity (TFP) growth and determine the share of each of the economic growth sources in the mining sector of Iran. The time period of this study is 1355-1385 of the Solar Hijri calendar (roughly overlaying with the time period of 1976-2006 of the Gregorian calendar). In this paper, the shares of total factor productivity growth (TFPG) and factors' accumulations in the economic growth of the mining sector are estimated using a neoclassical growth accounting approach. Based on the estimated restricted Cobb-Douglas production function and the results obtained from the Solow residual equation, the annual growth rates of TFP were measured for each year. According to the findings, the average annual growth rate of TFP has been 2.94% during the time period of the present study. The other findings of this study indicate that the average contributions of TFPG, labor accumulation and capital accumulation in the economic growth of the mining sector have been 56%, 23%, and 21%, respectively, during the time period of the study. As such, it can be concluded that the policy of benefiting from available factors in the mining sector together with the policy of accumulating factors have simultaneously caused the value-added growth of this sector. Therefore, considering the desired performance of the mining sector in terms of its sizable productivity growth, it can be argued that the mining sector can aid Iran's economic development plans to achieve their assigned economic objectives, one of which is to increase the share of total factor productivity growth in economic growth.

Date: 2016-12
New Economics Papers: this item is included in nep-ara, nep-cwa, nep-gro and nep-ino
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Published in Iranian Economic Journal - Macroeconomics (IEJM), No. 13, pp. 121-142

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