Capacity Realization and Productivity Growth in a Developing Country: Has Economic Reform Had Impact? / Edition 1

by Ruhul A. Salim

Overview

First published in 1999. Firms in manufacturing industries are influenced by the market-oriented liberalization reform policies in many developing countries since the late eighties. However, studies applying appropriate methodology to appropriate data seldom analyze the impact of reforms on the performance of production units such as manufacturing firms. The central point of this book is to address this issue by comparing firms’ achievement with 'best practice' performance before and after reforms. This form of analysis is not new but it emphasizes a new focus or realignment of thinking within neoclassical economics to develop an analytical framework. This book examines the productivity growth of Bangladesh manufacturing firms as component measures of changes in capacity realization and technical progress. The significant feature of this approach is that it allows for the inefficiency of firms, and thus productivity growth is estimated rather than taking it as a residual as is usually measured in the traditional growth accounting approach. High rates of technological progress, on the one hand, can co-exist with low rates of capacity realization. On the other hand, relatively low rates of technological progress can co-exist with an improving capacity realization. As a result specific policy actions are required to address the difference in the sources of variation in productivity. In this respect this book would provide invaluable insights for policy makers, development practitioners, academics and students of economics.

Product Details

ISBN-13:	9781138611047
Publisher:	Taylor & Francis
Publication date:	06/30/2020
Series:	Routledge Revivals
Pages:	240
Product dimensions:	6.00(w) x 8.62(h) x (d)

Table of Contents

List of Figures viii

List of Tables ix

Foreword xiii

Preface xv

List of Abbreviations xvii

1 Introduction 1

The Setting 1

Issues and Questions 4

Chapter Outline 6

2 Policy Regimes and Development Experiences in Bangladesh 9

Introduction 9

Bangladesh Economy Pre-reform Era (1973-82) 10

Policies that Affected Industrialization in the 1970s 21

Economic Policy Reforms in the 1980s and the Bangladesh Economy 26

Conclusion 38

3 Productive Performance Measures: Total Factor Productivity (TFP) Growth and Productive Capacity Realization 43

Introduction 43

Total Factor Productivity Growth: Theories and Methodologies 44

Productive Capacity Realization: Theories and Methodologies 54

Frontier Production Function and Productivity Measures 65

Conclusion 68

Appendix 69

4 Suggested Measures of Productive Capacity Realization and Productivity Growth 75

Introduction 75

Measurement of Productive Performances: The Random Coefficient Production Frontier Approach 77

Estimation Procedures for the Coefficients and Covariances 82

Measuring Firm-Specific PCR 87

Measuring the Sources of Output Growth 89

Conclusion 93

5 Measuring Productive Capacity Realization in Selected Manufacturing Industries 96

Introduction 96

Structure and Performance of Selected Industries 97

Model Specification and Estimation 102

Data Sources and Variables Construction 104

Results and Interpretation 110

Measurement of Capacity Realization 115

Conclusion 123

Appendix 124

6 Sources of Output Growth: Empirical Estimation and Interpretation of Results 127

Introduction 127

Sources of Growth Analysis 128

Some Comparative Analysis 133

Decomposition of TFP Growth 136

Biases in Technological Progress 143

Summary and Conclusions 147

7 Determinants of Capacity Realization: An Empirical Analysis 152

Introduction 152

Determinants of Capacity Realization: Theory and Evidence 153

Analytical Model 162

Empirical Results and Interpretation 175

Summary and Conclusions 186

Appendix 188

8 Conclusions and Policy Implications 192

Major Findings 193

Policy Implications 195

Limitations and the Focus of Further Study 197

Bibliography 199

Index 222

Editorial Reviews

Examining the reasons why manufacturing in Bangladesh has shown disappointing performance even after implementation of economic reform measures, this study surveys relevant literature; examines the productive performance of the manufacturing sectors in Bangladesh based on economic theory, econometrics, and empirical information; reviews the history and structure of the manufacturing sector and techniques for analyzing productivity; discusses the model used; discusses results; makes comparisons with earlier studies; and offers policy conclusions. Annotation c. Book News, Inc., Portland, OR (booknew.com)

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