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| Volume 11, No. 1,
June
2012 |
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The Determinants of TFP Growth
in Middle Income Economies |
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in ASEAN: Implication of
Financial Crises |
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Sarath Delpachitra |
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Flinders Business School,
Flinders University, Australia |
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| Pham Van Dai |
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Economic Research Department,
Maritime Bank, Vietnam |
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| Abstract |
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Maintaining a sustained level of
productivity growth is an important aspect of the economic
development process, particularly in periods of economic turbulence.
This paper examines the determinants of total factor productivity (TFP)
growth and their behavior in five middle-income ASEAN countries
during events such as the Asian Contagion and the Global Financial
Crisis. In particular, this paper examines the effects on
TFP of
foreign direct investment (FDI), trade, the agricultural sector,
government spending, human capital, and dummy variables representing
the financial crises. The results show that trade, government
spending, the scale of the agricultural sector, and the dummy
variables have significantly influenced productivity growth.
Government spending affects it positively, and the scale of the
agricultural sector and the dummy variables representing the Asian
Contagion influence it negatively. These empirical findings support
the popular belief that trade significantly influences
TFP growth,
but the trend is not consistent with expectations. Despite strongly
supportive theoretical arguments, this study does not find the human
capital and FDI variables to be significant. Notably, there is no
evidence to suggest that the Global Financial Crisis has had a
significant influence when compared with the Asian Contagion. |
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Key words:
total factor productivity; economic growth; financial crises |
| JEL
classification:
C23; G01; O47 |
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