A Study on the Decomposition of Productivity Factors in Regions Manufacturing Industry: Based on Busan Region

Abstract

Purpose - The purpose of this study is to analyze the growth factors of Total factor productivity in Busan’s manufacturing industry and to provide implications. The results of the empirical analysis are as follows. Design/methodology/approach - This research analyzes data with the frontier production function that allows estimation of technological efficiency changes on the relationship between input of factors and the maximum output. The data also uses panel data that combines time series and cross sections rather than simple time series. Findings - The share and growth rate of the Busan manufacturing industry’s sales and value-added have decreased, and is significantly lower than those of the Whole country. Both technical efficiency and technological progress have deteriorated over time. The degree of decrease in technical efficiency, technological progress and total factor productivity all grows over time, and the degree of decrease in technological progress is greater than that of technology efficiency. Research implications or Originality - The total factor productivity has deteriorated to negative since 2016. By industry, metal-related products and machinery and transportation equipment industries have relatively large technical efficiency, technological progress and total factor productivity. On the other hand, there is low technical efficiency, technological progress and total factor productivity in labor-intensive industries such as leather, bags, shoes, textiles, pulp and paper, furniture.