Decomposing total factor productivity growth in manufacturing and services

N. Foster-Mcgregor*, B. Verspagen

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review


Using the World Input–Output Database, this paper calculates total factor productivity (TFP) growth for a sample of 40 economies during the period 1995–2009 to show that TFP growth in Asian economies has been relatively strong. In a number of Asian economies, TFP growth in services has outpaced that in manufacturing. This paper presents a novel structural decomposition of TFP growth and shows that the main drivers of aggregate productivity growth, as well as differences in productivity growth between services and manufacturing, have been changing factor requirements. These effects tend to offset the negative productivity effect of a declining ratio of value added to gross output.
Original languageEnglish
Pages (from-to)88-115
Number of pages28
JournalAsian Development Review
Issue number1
Publication statusPublished - 2017

JEL classifications

  • d24 - "Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity"
  • o10 - Economic Development: General


  • Manufacturing and services
  • Structural decomposition
  • Total factor productivity
  • economic growth
  • manufacturing
  • service sector
  • total factor productivity
  • Asia

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