This empirical study employs stochastic frontier analysis to evaluate the Total Factor Productivity (TFP) growth and technical efficiencies of the manufacturing sector in Bangladesh. The study draws data from five rounds of surveys conducted between 1982/83 and 2012. TFP growth is decomposed into efficiency growth, scale component, and technological progress to identify the sources of growth. The technical efficiency of the manufacturing industries in Bangladesh averages 80%, with export-oriented industries exhibiting higher efficiency than non-export industries. Small-scale industries show higher TFP growth than medium- and large-scale industries. The study estimates the TFP growth in Bangladesh's manufacturing sector at approximately 5.5% during the review period, with technological progress being a key driver of growth. The results also indicate TFP growth convergence over time among the manufacturing industries in Bangladesh. The study highlights the potential for productivity improvement and income growth in Bangladesh's manufacturing sector. Further investigation into TFP and efficiency is necessary to achieve this potential fully. The study's findings suggest that policymakers in Bangladesh should focus on promoting technological progress and improving the efficiency of manufacturing industries, especially in medium- and large-scale industries. Moreover, the government should develop policies that support export-oriented industries to improve their efficiency.
In this study we use the stochastic frontier model in estimating total factor productivity (TFP) growth and technical efficiencies for manufacturing industries in Bangladesh by using surveys collected during five rounds in 1982/83, 1984/85, 1988/89, 2005/06 and 2012. To detect the source of growth, we further decompose Total Factor Productivity growth into efficiency growth, scale component, and technological progress. Our result establishes that, on average, technical efficiency was 80%, noting that the export focused industries are comparatively more efficient than non-export focused industries. Furthermore, medium, and large-scale industries have a lower TFP growth than small scale industries. Furthermore, the Total Factor Productivity growth estimations shows that productivity in the manufacturing industries in Bangladesh was approximately 5.5% in the review period illustrating that technological progress is a major driver of growth. Additionally, this study provides evidence on the likelihood of TFP growth convergence over time among the manufacturing industries in Bangladesh. JEL classification: D24; O14
In this study we use the stochastic frontier model in estimating total factor productivity (TFP) growth and technical efficiencies for manufacturing industries in Bangladesh by using surveys collected during five rounds in 1982/83, 1984/85, 1988/89, 2005/06 and 2012. To detect the source of growth, we further decompose Total Factor Productivity growth into efficiency growth, scale component, and technological progress. Our result establishes that, on average, technical efficiency was 80%, noting that the export focused industries are comparatively more efficient than non-export focused industries. Furthermore, medium, and large-scale industries have a lower TFP growth than small scale industries. Furthermore, the Total Factor Productivity growth estimations shows that productivity in the manufacturing industries in Bangladesh was approximately 5.5% in the review period illustrating that technological progress is a major driver of growth. Additionally, this study provides evidence on the likelihood of TFP growth convergence over time among the manufacturing industries in Bangladesh.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
customersupport@researchsolutions.com
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
Copyright © 2024 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.