Total factor productivity, its components and drivers

Abstract

AbstractWe consider how the growth of total factor productivity (TFP) was affected by R&D, trade, information and communication technology, and catching-up for the period from 1990 to 2006. Our contributions are: Firstly, to decompose TFP growth into two distinct measures for catching-up and for innovation using the Malmquist index; secondly, to update related investigations. Summarizing our findings, catching-up effects are statistically important, whereas frontier shifts tend to be smaller with increasing distance to the frontier, and large differences exist and persist between sectors and countries.