An Investigation into Factors Affecting Productivity of Produces by Karoun Agriculture and Industry Company

Abstract

Due to the limitation of production factors, our world today is in a vital need for enhanced productivity, in both developed and developing countries. Hence, productivity and provision of proper approaches will lead to the improvement of economic situation. This study investigates productivity of production factors in Karoun agriculture and industry in the period between 1981 and 2010. The results obtained from the fitting of the model indicate that variables have the condition for the convergence test and there is a long-term balance correlation between the variables. In order to investigate the short-term dynamics and its correlation with long-term relationships, error correction model (ECM) was used. Results obtained from this model indicate that, as expected, ECM sign is negative and its value is 0.61. In order to calculate productivity, detailed productivity method (mean and final productivity) was used. The results obtained from this study demonstrate that the main variables, such as labour and capital, affect productivity. Tensions obtained from fitting of the model demonstrate the share of each factor. The tension of capital and labour is respectively 0.013 and 0.373 in a way that productivity of capital was increased in some years and decreased in some others, showing a fluctuant decreasing trend on the whole. On the other hand, productivity of labour increased in some years and decreased in some years, but it showed a fluctuant increasing trend on the whole.