Measuring the technological change and productivity in food, textile and chemical industries in Kuwait (1992–2002)

Abstract

The purpose of the present paper is to analyze the mechanism of structural change in the Kuwaiti manufacturing sector using the input–output framework combined with factor-productivity analysis for selected sectors with special reference to high technology industries. The proposed methodology integrates factor productivity and relative price analysis with input–output model by using V-RAS method. This approach is a modified RAS method including primary factors in a consistent framework. The model developed is then used for simulation analysis, which is carried out through the design of various alternative scenarios on Kuwait’s industrial sector for the year 2002. Two main results are derived from the analysis. First, the acceleration in technical progress gives rise to a higher rate of investment and industrial growth with more imports and lower trade surplus. Second, the demand for primary imports in accelerated scenario tends to fall, offsetting its saving effect by its higher income effect.