Productivity and economic growth in East Asia: innovation, efficiency and accumulation

This paper uses a varying coefficients frontier production function model to examine the sources of growth between 1987 and 1993 in four East Asian economies-Hong Kong, Singapore, Japan and South Korea. Using data for 20 manufacturing sectors at the three-digit SIC level, this study provides the first comprehensive examination of sources of growth that allows one to decompose total factor productivity growth, separating out technical efficiency changes (TECs) from technological progress (TP). We find that while there is ample evidence of the importance of increasing inputs in growth, and there is some support for technical efficiency change, or catching up to the frontier over this period, there is weak or even negative evidence for the role of technological progress, measured as a shift in the estimated production frontier. (C) 2002 Published by Elsevier Science B.V.