The purposes of this study are to measure total factor productivity (TFP) within the manufacturing sector from 1966 to1989, and to analyze the productivity trend, its determinants and to propose a policy alternative to increase productivity. TFP is the portion of output explained by factors such as labor, capital, and industry, and it is one of the key aspects in determining national competitiveness.
From 1967 to 1988, Korea’s overall manufacturing industry increased by 18% on average per year and TFP reached 1.9%, but as time passed the rate started to slow down. The contribution rate of each factor was 0.8%, 2.4%, and 12.9%, respectively. Due to a sharp decrease in capital productivity, TFP in the manufacturing sector slowed down dramatically in the late 1970s. The production growth rate in the heavy and chemical industry sector reached 21%, which was 6% higher than light industry, but TFP growth rate was only 2.0%. In comparison with the TFP in light industry, it was only 1.0% higher. Therefore, this analysis determines that in terms of contribution in TFP, the heavy and chemical industries sector was lower than light industry, and capital and labor investment was higher.
Technological changes in between 1967 and 1988 appeared to have characteristics of economic labor or working capital. Generally, changes in economic labor imply that there was more need to use intermediate goods. Other factors such as export policy, R&D investments, operation rate, energy intensity, market concentration, and rate of joining labor union will have major impact on increasing TFP, and more study is needed to find exact determinants.
Korea’s TFP growth rate decreased sharply in the late 1970s and decreases in capital productivity had direct contribution to this phenomenon. Capital productivity, which showed industry effectiveness by the establishment of major export policies in the 1960s, had diminished by mid-1970s, and it appears that emulating developed countries technologies and policies do not contribute in increasing TFP.
제조업의 총요소생산성동향과 그 결정요인
[서울] : 한국개발연구원
|Series Title; No||연구보고 / 92-06|
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Industry and Technology < General|
|Holding||KDI; KDI School|