Economic shrinking and total factor productivity: does TFP help explain resilience to contractions in the post-war era?

Purpose – This study aims to analyze the total factor productivity (TFP) performance of Chinese counties and cities over the period from 2007 to 2010. Chinese regional and urban–rural TFP performance are investigated by using county-level data, and the impact of the urbanization policy on TFP is discussed. Design/methodology/approach – The data envelopment analysis (DEA)-Malmquist technique and Kumbhakar–Sun’s semi-parametric model are used for TFP change measurement and comparison. The county-level TFP performances are summarized and studied by statistical methods. Their spatial distribution is exhibited in a geographical thematic map. Findings – The county-level analysis proves that China underwent a large-scale TFP decline over the period from 2007 to 2010. Statistically speaking, cities’ TFP growth is more positive than counties’; however, different provinces also have their regional characteristics. In addition, the Chinese Hukou (household registration) institution divides Chinese urbanization into halves, which have the opposite correlation on TFP growth. Research limitations/implications – Because the collection of county-level data is enormous and costly, this study only focuses on a very short period (2007-2010) with estimated data. This TFP change analysis is limited to the short-term phenomenon around the 2008 international financial crisis. Practical implications – This study provides a visual spatial distribution for county-level TFP change in China over the period 2007-2010. Results of the analysis demonstrate that the Chinese Hukou system is among the policy factors that can influence productivity in the course of urbanization. Originality/value – The achievement of the first nationwide county-level TFP change study for economic growth in China is innovative. This study provides a unique perspective for understanding productivity performance at the regional level over the period investigated, which provides invaluable data for investigating the impact of urbanization and the rural–urban gap on TFP growth.

Continuous cotton ( Gossypium hirsutum L.) production was examined using data from Alabama's long‐term Old Rotation experiment (c. 1896). Index values were used to examine trends in productivity and sustainability for 95 yr. Treatments studied were those receiving (i) no N fertilizers and no winter legumes for 95 yr, (ii) only winter legumes as a source of N, and (iii) chemical fertilizer N. Three sets of index numbers were calculated from all inputs and outputs involved in the production systems: (i) total factor productivity (TFP), which accounts for all direct production inputs, but which does not consider production externalities; (ii) productivity relative to a base plot;and (iii) total social factor productivity (TSFP), which accounts for all direct production inputs as well as externalities of soil erosion and pesticide use. Viewed from the 95‐yr perspective of the Old Rotation experiment, all three treatments fulfill at least one criterion required for a system to be considered sustainable. Output per unit of input is higher in 1991 than in 1896, even when externalities are valued. None of the systems showed a linear trend in output or TFP over the life of the experiment;productivity cycles are present in all three systems, despite a positive overall trend. An average annual rate of TSFP growth of 1.8%/yr was attained. Accounting for erosion and pesticide externalities reduced the annual productivity growth rate by 0.2%/yr. The system that has neither an organic nor a chemical source of added N was less productive and less sustainable than the two other systems, with a 0.3%/yr TSFP growth rate. The plots using organic and chemical sources of N had similar productivity impacts. Valuing soil erosion and pesticide externalities had only a modest effect on measured productivity. The most dramatic single event to affect the productivity of cotton farming was the introduction of the mechanical cotton picker. The impact of this technology was powerful enough to offset the effect of many other changes in the system. Research Question Is cotton production in the southeastern USA sustainable? How do we measure sustainability of a crop that has been produced for almost 200 yr in the same region but has a reputation for depleting the soil of nutrients, extensive soil erosion, and high pesticide use? The objective of this study was to use input and output indexes and a calculation of total factor productivity (TFP) to determine if cotton production using different management strategies is sustainable over nearly a century of continuous production. Literature Summary Most researchers agree that a sustainable system should maintain or enhance agricultural production, reduce the level of production risk for the farmer, protect natural resources, be economically viable, and be socially acceptable. Measuring all of these attributes of a production system is very difficult. However, using the extensive data available from historical, long‐term experiments should provide insight as to sustainability of certain production systems. Alabama's Old Rotation (c. 1896) is the oldest continuous cotton experiment in the world. Input and output (yield) records and estimates allow calculation of TFP indexes over the 95‐yr history of continuous cotton production. Different cotton production systems can be compared. Study Description Three continuous cotton systems from the Old Rotation were chosen for comparison: (i) No N and no winter legumes since 1896 (No N), (ii) winter legumes (crimson clover and/or vetch) as the only source of N since 1896 (winter legumes), and (iii) no winter cover crop and 120 lb N/acre as ammonium nitrate since 1956 (N fertilizer). Where input records were not recorded (e.g., labor, costs, machinery, etc.), they were estimated from USDA, Alabama Agricultural Experiment Station, and Alabama Cooperative Extension Service publications. Soil erosion estimates for the three cropping systems on a Pacolet fine sandy loam, were made using Erosion Productivity Index Calculator modeling. Input, output, TFP, and total social factor productivity (TSFP) indexes for 95 yr were calculated. Total social factor productivity includes estimated values for the negative offsite effects of soil erosion and pesticide use. Applied Questions Is continuous cotton production sustainable? Viewed from the 95‐yr perspective of the Old Rotation, the no N, winter legume, and N‐fertilized continuous cotton plots all fulfill at least one criterion required for a system to be sustainable. Output per unit of input is higher in 1991 than in 1896, even when externalities (erosion and pesticides) are valued. The average growth rates on the No N plot are 0.5%/yr for TFP and 0.3%/yr for TSFP. On the winter legume plot, TFP and TSFP grew at a rate of 2.0%/yr and 1.8%/yr, respectively. The plots using organic and chemical sources of N had similar productivity records. None of the systems shows a linear trend in TFP over the history of the experiment. Productivity cycles are present in all three systems, despite the positive overall trend. An important focus of future research will be to explain whether these cycles are related to weather, technology, or changes in the resource base. As one would expect, the system that has neither an organic or a chemical source of added N is less productive than the two other systems. This system compares even more poorly when externality costs are assigned. Organic and chemical sources of N have similar productivity impacts. How have externalities such as soil erosion and the negative impact of pesticide use on the environment affected TFP? Soil erosion and pesticide externalities have had only a modest effect on measured productivity. The no N plot indexes are not changed at all; TFP on the legume and N‐fertilized plots decreased by 4 and 6%, respectively. The main conclusions of the previous question are therefore unaffected. How have technological advancements affected long‐term productivity/sustainability of continuous cotton production? The most dramatic single event to affect productivity was the introduction of the mechanical cotton picker around 1960. The impact of this technology is powerful enough to offset the effect of many other changes in the system. This advancement allowed cotton production to move from a labor‐intensive environment with increasing labor costs per pound of yield to an environment where harvesting costs were not seriously affected by increasing yields. Because technological advancements cannot be predicted into the future, predicting the long‐term sustainability of a system becomes very difficult.

Total factor productivity (TFP) was used for some years as a single indicator for measuring performance of government trading enterprises in Australia. More recently there has been a shift in emphasis towards financial criteria, with little or no mention of TFP. But it is well known that financial measures can be inappropriate for enterprises with market power.We show that it is important to monitor both TFP and financial performance. TFP performance alone can be misleading and be achieved at the expense of financial performance—this is illustrated for Australian National Railways during the 1980s. TFP and financial performance can be directly linked, and this provides a better framework for performance assessment over time. We explore the relationship between productivity, price performance, and various financial measures.

In Vietnam, agriculture is a key sector that promotes economic growth and poverty reduction. Therefore, improving productivity in agriculture is indispensable to the sustainability of the country. This research examined productivity and its determinants from 420 enterprises operating in agriculture. Productivity was measured as the total factor productivity (TFP) obtained from fixed and random effects models. The determinants of TFP including size and age, share of state and foreign ownership, export, accessibility to Internet and bank loan of firms, controlled for year fixed effects, were analyzed. It was shown that 74.6% companies in the agricultural sector were small in size (< 10 < 200 employees). Although the number of large firms (>300 employees) explained 10.6%, they had a remarkable and positive TFP (38.8%, p < 0.01), while both small and very small (<10, and <200 employees, respectively) had strikingly negative TFP values (−71.3% and −32.1%, respectively, p < 0.01), as compared to the medium sizes (< 200 < 300 employees). It was also revealed that although foreign ownership was only 3.8% on average, it had a notably positive effect on TFP (55.0%, p < 0.01). In contrast, state ownership accounted for 30.7%, but it had a negative influence on TFP (−7.5%). The export contributed a negligible and statistically significant effect to TFP (2.6%), which might be attributed to a limited number of firms (4.5%) having mobility in agricultural export. 73% received a bank loan, and only 18.2% had access to the Internet, but both of them yielded remarkable TFP values (18.5%, p < 0.01 and 3.4%, p < 0.05 respectively). The Hausman test indicated that the fixed effects (FE) model was more effective than the random effects (RE) model to estimate the TFP. The findings of this study suggested that reform efforts should focus on improving the productivity of small agricultural enterprises. In addition, foreign investment, effective use of bank loan and Internet accessibility should be further enhanced. The results of this study may provide insights for policymakers who aim to improve the productivity in agricultural enterprises and thereby contribute to the sustainable growth of the country.

Research background: Total factor productivity (TFP) determines how efficiently and intensely the available inputs are used and combined in production process. Improvement of TFP performance requires identification of its determinants, thus enabling policy actions to focus on them. Since the ability to create and absorb innovation is considered as a crucial factor of economic development, the investigation of the impact of the level of regional innovative performance on TFP distribution across EU regions is an important research problem. Purpose of the article: The aim of the paper is twofold. Firstly, we attempt to develop a theoretical framework for the analysis of the impact of innovation on TFP. Secondly, we assess TFP levels for regions in the EU and investigate whether innovations account for the observed regional disparities in TFP. Methods: The research sample consists of 202 European Union (EU) regions at NUTS 1 and NUTS 2 level from 22 countries. The regional data on GDP, employment and gross fixed capital formation come from the Eurostat. The source of data on the level of innovativeness of European regions is the Regional Innovation Scoreboard. To calculate TFP, we use the multiplicatively-complete Färe-Primont index. In turn, to examine the impact of innovation on TFP, we employ the spatially-lagged X model. Findings & Value added: Our findings show a high degree of dispersion in TFP across EU regions. We find a positive impact of regional innovation performance on TFP. Although theoretical papers on economic development and regional economics suggest that improvements in TFP are key to regional economic performance, and that innovations are crucial to gain such productivity effects, there is a dearth of empirical studies on the link between innovation and TFP at the regional level. Therefore, our paper attempts to fill this gap by providing the evidence of positive effect of innovation externalities on TFP in European regions.

Regional economic development in Europe: the role of total factor productivity

Enerji etkinliğinin yaygın bir göstergesi olarak kullanılan enerji yoğunluğu, enerji politikalarının temel unsurlarından birini oluşturmaktadır. Nitekim, ülkelerin ulusal enerji verimliliği eylem planlarında, enerji yoğunluğunu azaltmaya yönelik politika oluşturulması başlıca hedefler arasında yer almaktadır. Enerji açısından dışa bağımlılığı yüksek olan Türkiye ekonomisi için enerji verimliliğinin arttırılmasına yönelik stratejilerin öneminin önümüzdeki on yıllarda artacağı aşikardır. Enerji verimliliğinin iyileştirilmesi, Toplam faktör verimliliği iyileştirmesine dayandığından toplam faktör verimliliğindeki iyileştirmeler son yıllarda politika yapıcılar için önemli öncelik olmuştur. Böylelikle sürdürülebilir kalkınma stratejisi kapsamında, enerji yoğunluğunun azaltılmasında toplam faktör verimliliğinin rolünün anlaşılması önemlidir. Dolayısıyla, Türkiye ekonomisinde enerji tüketimi açısından en önemli sektör olan imalat sanayi için enerji yoğunluğunun azaltılması ve enerji yoğunluğunu etkileyen faktörlerin belirlenmesi oldukça önemlidir. Bu bağlamda, bu çalışmanın amacı, imalat sanayi ve seçilmiş dört al sektör için enerji yoğunluğu ile toplam faktör verimliliği ve firma karakteristik özellikleri arasındaki ilişkiyi incelemektir. Bu çalışmanın bulguları, enerji yoğunluğu ile toplam faktör verimliliği ve çok sayıda firma özelliği arasında güçlü bir ilişki olduğunu göstermektedir. İmalat sanayinde faaliyet gösteren firmaların enerji yoğunluğunun, toplam faktör verimliliği, çalışan başı sabit sermaye stoku ve firma büyüklüğünün artması ile azalması beklenmektedir. Bulgular, makro bir politikanın değil enerjinin verimli kullanılmasını teşvik etmeyi amaçlayan firma bazlı sellektif politikalara işaret etmesi açısından önemli ipuçları vermektedir.

This study examines the effect of environmental, social, and governance (ESG) performance on company value, focusing on the mediating role of total factor productivity (TFP) and the moderating role of R&D innovation investment. Using data from Chinese A-share companies (2012–2022) and a moderated mediation model, the study found that ESG performance enhances company value both directly and indirectly through TFP. R&D innovation investment strengthens both effects, highlighting the synergy between ESG and innovation strategies in maximizing value creation. This effect is most pronounced in the high-tech and manufacturing sectors, underscoring the importance of integrating ESG initiatives with innovation to foster sustainable growth.

The article focuses on researching and identifying the contribution of Capital, Labor, and Total Factor Productivity (TFP) to GRDP growth and the role of science, technology, and innovation in enhancing TFP in Ha Tinh province, Vietnam. The research results show that the role of TFP in the GRDP growth of Ha Tinh is increasingly important, particularly in the value-added (VA) of businesses, where TFP's impact is becoming more evident and contributes significantly to the increase in VA of enterprises. However, the contribution of science, technology, and innovation to TFP and the province's GRDP is showing a declining trend. This is due to a period of strong technological investment, during which businesses may have reached a saturation point where current technologies have fully exploited their potential. This could become a development barrier for the province, especially in the context of prolonged difficulties faced by enterprises, reduced investment in research and development (R&D), and challenges in attracting large technology companies to invest in the area. Based on these findings, the study proposes several indicators for science, technology, and innovation in the province by 2030, including enhancing the attraction and effective use of foreign capital in the field of science, technology, and innovation, and developing science and technology aimed at modern industry, comprehensive, and sustainable development in Ha Tinh province.

Total Factor Productivity and Social Cooperation: Theoretical Framework and Tentative Empirical Analysis

In this paper the contribution of scientific and technological progress (STP) in economic growth in Anhui province’s construction industry from year 1999 to year 2009 was analyzed by total factor productivity (TFP) method, and the role of TFP in the transformation of economic growth pattern in Anhui province’s construction industry and in corporations’ efforts to enhance industrial competitiveness was analyzed. It found that the key influencing factors in Anhui province’s construction industry’s economic development were capital input and labor input which its growth was driven by resource elements aggregation and its TFP played a poor role. To enhance TFP will be the only way to constructing industry’s sustainable development and to effectively increasing construction industry companies’ core industrial competitiveness.

The common denominator of the European Union’s (EU) strategic long-run documents is the role of total factor productivity in fostering future growth and competitiveness. Hence, this article analyses the impact of total factor productivity on export competitiveness in EU new member states (NMS). As opposed to the stagnation of the growth of total factor productivity in the advanced economies, EU NMS exhibited stronger growth that was interrupted due to the 2008 economic and financial crisis. After the crisis, the growth continued but it was not as strong as before. The results of the empirical analysis confirm the vital role of total factor productivity for the export competitiveness of the EU NMS. However, the results also point to the fact that the impact of total factor productivity on export competitiveness is not that beneficial in the countries where the value of total factor productivity has not returned to the pre-crisis level.

Purpose of the Study: Egyptian agriculture suffers from many problems related to the use of available economic resources, the most important of which is lack of optimal utilization of resources, wasteful use of agricultural production inputs, reduced efficiency of irrigation water use, and the fertility of agricultural lands are deteriorating, in addition to increasing rates of encroachments on agricultural lands and shifting it from agricultural use to other non-agricultural uses, which limits the agricultural sector ability to achieve high growth rates, especially with the increasing global production of biofuels from crops that individuals consume as food, including wheat and corn, which constitutes an explicit threat to Egyptian food and national security.
 Objectives: The research aimed to:
 
 Estimate the changes in the sources and components of the total productivity of the factors for the main cereal crops in Egypt in the presence and absence of carbon dioxide emissions,
 Environmental impact assessment of changes in the productivity of these crops.
 
 Methods: The study applied analytical approaches to measure changes in productivity, as parameter analysis methods are used as methods of the aggregate production function, and non-parameterized methods of estimation, in addition to (Malmquist, 1953) which is one of the most important indicators of measurement changes in productivity and relies on a Data Envelopment Analysis (DEA) to measure efficiency and changes in TFP productivity and identify the sources of changes in productivity through changes in technical competence and technological change, as the two most important components of the change in total productivity.
 Results: Wheat Crop: Wheat crop by estimating the change in the different efficiencies of the wheat crop with co2 emissions, it was clear that a decrease in technological change (TC) during the study period, and thus a decrease in the average change in the total factor productivity (TFP), while without co2 emissions effect, the average change in the total factor productivity of (TFPc) indicates an increase in the actual wheat efficiency which is low due to the environmental impact of the emissions.
 Rice Crop: Rice crop by estimating the change in the different efficiencies of the rice crop with co2 emissions, it became clear that a decrease in the average technological change (TC), thus increasing the average change in the total factor productivity of the (TFP), whereas, without co2 emissions, it was found that the average change in the total factor productivity of the (TFPc) for the study areas was higher.
 Summer Maize Crop: It was clear that the average technological change (TC) for the summer maize crop with co2 emissions, decreased during the study period, and therefore a decrease in the average change in the total factor productivity of the (TFP), but without co2, an increase in the annual average of the change in technical efficiency (TEC), and a decrease in the average technological change (TC), i.e. in the use of technology, and an increase in the average change in the total factor productivity (TFPc).

I examine the Koizumi Junichiro era in Japan to derive lessons for the current Abe Shinzo administration that vows to get Japan back on the path of sustainable growth. Standard growth theory identifies total factor productivity (TFP) as the key to sustainable growth. The existing empirical evidence clearly indicates that economic recovery during Koizumi's tenure was accompanied by robust growth of TFP. To account for this improvement in TFP performance, I focus on developments during Koizumi's term: promotion of competition by introducing market discipline to various sectors of the economy, effectiveness of market entry and exit, and use of foreign competitive pressure to enhance domestic efficiency. KEYWORDS: Japanese economy, Koizumi Junichiro, Abenomics, total factor productivity.IN THE MIDST OF MOUNTING FEAR OF A THIRD LOST DECADE OF growth for Japan, newly elected prime minister Abe Shinzo aptly placed the priority of his first cabinet on reviving the economy following the landslide victory of his Liberal Democratic Party (LDP) in the general election of December 2012. His government has unveiled three of his economic program, dubbed Abenomics. The first two arrows involve pursuit of a dramatic regime change at the Bank of Japan as well as big fiscal spending to reflate the economy and jump-start its growth. Although these expansionary macroeconomic policies have thus far been effective in giving an initial boost to aggregate demand and reversing the deflationary trend, their initial impact may already be waning. In order to get the economy firmly back on a sustainable growth path, the Abe administration has yet to fill in the third arrow before its first two arrows eventually fizzle out.According to standard growth theory, total factor productivity (TFP) is the key to long-term economic growth as its growth rate represents the slope of the steady-state growth path. Economic growth is not sustainable and is destined to wind down if it is not accompanied by TFP growth. Therefore, the theory suggests that in order for Japan to have a successful growth strategy, the third arrow of Abenomics should aim at improving the country's TFP. Since reform proposals offered so far in Abe's two attempts to shoot the third arrow were generally viewed as modest and ambiguous, the third arrow obviously requires a more focused approach so that it clearly demonstrates the potential to liftthe country's TFP.I argue that Prime Minister Abe may not have to look further than the immediate predecessor of his earlier term in office to find valuable lessons for his growth strategy. Under the premiership of Koizumi Junichiro (2001-2006), Japan was poised to exit its long-running recession and head toward sustainable growth. To be sure, Koizumi's term was never free from controversy and is still the subject of frequent criticism. However, careful analysis of this period through the lens of standard economic growth theory reveals interesting policy implications.The Japanese Economy Under KoizumiKoizumi the Reformer?One word that was never in short supply in public discourse throughout Koizumi's term was reform. Entering the race for the premiership in 2001, Koizumi presented himself as a true reformer who would pull Japan out of its economic malaise. He pledged to put an end to the bad debt problems of the banking sector, clean up the decadelong financial mess, and stand up to the entrenched government bureaucracy by (among other things) privatizing the country's postal savings system.Koizumi was not the first prime minister to talk about the country's need for structural reform. The Big Bang in the Japanese financial sector had already started as early as November 1996 when then Prime Minister Hashimoto Ryutaro announced wide-ranging financial deregulation measures. In fact, deregulation was already high on the policy agenda under the premiership of Murayama Tomiichi, a predecessor of Hashimoto. …

Despite rapid industrialisation, agriculture remains an important source of livelihood for one third of the population in China. The purpose of this paper is to analyse agricultural total factor productivity and its components for mainland China between 1990 and 2012 at a provincial level. Growth accounting and Malmquist index methodologies are used to measure the total factor productivity growth in 30 Chinese provinces over the period 1990-2012. Results suggest that technological change has generally been improving rapidly for most provinces. However, of some concern is the fact that technical efficiency change is generally stagnant across most provinces. Jiangsu stands out in its total factor productivity performance, while Tibet and Yunnan are clear laggards.