An Assessment of influencing Factors on total factor productivity (TFP) with emphasis on human capital
Subject Areas : Financial Economics
Alireza Amini
1
(Assistant Professor, Islamic Azad University ,Central Tehran Branch)
Shahram mosalla
2
(Economical and financial expert in IKAMCO)
Keywords: Total factor productivity, Human Capital, Technical Progress, Research & Development,
Abstract :
In this study, we have measured TFP over the period 1994 - 2004 by applying Solo residual and Tornquist index technique. The trend of TFP has been studied and compared with in twodigit ISIC classification over the same period. The results of productivity measurement show that TFP in this period has increased on average by 6.9 percentages annually and its share in production growth is 65.8 percent. In addition, by using an endogenous growth model focusing on human capital, attempts have been made to elaborate the role of education, skill and technical progress in the growth of TFP. The results, based on the application of the panel data technique, show that education and skill, have positive and meaningful effect on TFP Moreover, the increasing share of technicians and engineers to total employment tends to increase productivity up to 17.21 but beyond this relative share, it cast a negative effect. On the other hand, technical progress has tended to have a positive effect on TFP. Further utilization of excess capacity and capital productivity enhancement has had a positive and meaningful effect on improvement of total factor productivity.