Accounting Total Factor Productivity of FDI Firm in Nepal

Raghu Bista

MPRA Paper from University Library of Munich, Germany

Abstract: Economic Reforms towards economic liberalization and privatization is a good prescription to attract FDI in productive sectors. In 1990, Nepal liberalized her economy to create investment environment and destination of FDI by minimizing structural and institutional barriers and constraints for promoting TFP of productive sectors. This study investigates empirically what is TFP growth of FDI in Nepal in 1990 after economic liberalization process. We use econometric model based on Cobb Douglas production function and theoretical model of TFP growth accounting method. The econometric and non-parametric TFP estimation provides mostly positive TFP growth of FDI firms in Nepal. Few cases were influenced by political and security disturbances. Almost positive TFP growths have increasing productivity but there are still lower than expectation. There are still problems of massive inferior labor, no significant technological and financial transfer and poor business environment. Issues of continuity and stability between two periods indicate unpredictable situation of productivity.

Keywords: FDI; TFP growth; economic reform; liberalization (search for similar items in EconPapers)
JEL-codes: C54 C6 C61 E2 E23 E24 J5 O4 O47 (search for similar items in EconPapers)
Date: 2019-02-05, Revised 2019-02-10
New Economics Papers: this item is included in nep-bec, nep-eff and nep-mac
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Published in Journal of Advanced Research in Business Law and Technology Management 1.2(2019): pp. 1-6

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:100279

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