TFP Y
III. TFP Outputs and Comparison
Productivity Comparison
The TFP indices in the upper section27) of Table 3.1 - Table 3.3 give the TFP levels of any country relative to United States (US) productivity, which
26) In many cases, the estimated labor shares are considered not reasonable, since
sˆ
ctare estimated to be greater than 1 or too big, even though being less than 1. For these cases, the average labor share of the rest of the industries in the corresponding country is used as a proxyfor the unrealistic labor share.
27) For 3 manufacturing branches,
Total Factor Productivity Comparison in the Energy Intensive Manufacturing Industries
are expressed as 100.0 in 1990. The TFP indices in the bottom section stand for a country's productivity relative to the U.S.A TFP in each year.
Table 3.1 and Figure 3.1 show that the United States was the highest productivity country during 1980s and 1990s in the manufacturing sector among the countries compared. For example, the U.S TFP in 1980 registered 95.2 relative to 100 in 1990. In 1980, Canada, inthe second position in TFP, was 93.3 percent of the U.S level, U.K 59.1 percent, Norway 58.8 percent and Korea 26.9 percent, respectively. In brief, the leading
position of the United States in the manufacturing sector persisted over time, although the TFP gaps of the followers such as Austria, United Kingdom and Sweden decreased over time. The productivity levels of most countries in 1990 registered 70-80 in index number, indicating that productivity was 70-80 percent of that of the U.S.A. TFP in 1990. Norway (60.6), Italy (57.3) and Korea (31.5) were out of this range.
usa usa x
x
j usa j
j usa x
j j x j j usa
j j x
usa
x
k
k l
l k k l l y TFP y
σ σ σ
σ − −
=
1 1990 . 1990
. 1
1990 . 1990 .
and for manufacturing sector as a whole,
usa usa
x j x
usa j
x
k k l
l
k k l l y
y y
TFP y
usa usa
x x usaj
j j
N xj usa j x
σ σ
σ ρ σ
ρ
−
−
=
⋅
Π
=
1 1990 . 1990
.
1
1990 1 .
1990 .
Eui-Seok Yang
Figure 3.1 TFP Trends of OECD Countries Manufacturing Sector
0.0 20.0 40.0 60.0 80.0 100.0 120.0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998
Aut Bel Can Fin Fra GBR Ita Kor Nld Nor Swe Usa
It should be noted thatthe productivity gaps have decreased during 1990-1998 period, during which the United States did not register any improvement in TFP. In 1998, the productivity of the United States was 100 in terms of the index number, exactly the same as 1990, even though the productivity showed a little improvement during 1990-1995.
On the other hand, the followers were catching up with the leader (U.S.A.) in eight years since 1990.
Table 3.1: Total Factor Productivity (TFP) ISIC 3:Manufacturing Sector
YEAR Aut Bel Can Fin Fra U.K Ita Kor Nld Nor Swe U.S.A
TFP is expressed relative to a base of U.S.A in 1990 =100
1980 62.2 80.7 88.4 64.9 74.4 56.2 63.9 25.6 59.3 56.0 70.5 95.2 1981 56.9 70.7 82.3 60.9 72.2 56.5 60.8 27.0 57.2 52.6 65.8 94.2 1982 55.8 75.5 71.9 59.1 71.5 58.8 59.9 28.8 58.6 51.8 66.5 91.9 1983 56.5 77.0 74.4 60.8 72.5 63.6 59.5 31.0 62.9 56.3 72.7 92.7
Total Factor Productivity Comparison in the Energy Intensive Manufacturing Industries
1984 56.8 80.3 77.7 63.9 73.2 66.5 61.7 33.3 67.7 60.9 78.4 96.6 1985 60.0 83.6 78.0 63.3 72.8 67.4 62.1 32.9 67.8 52.8 78.6 95.4 1986 63.6 85.7 78.5 62.7 72.1 67.7 63.5 34.3 68.9 52.4 80.8 94.7 1987 64.1 81.1 79.4 66.1 70.9 70.4 63.9 33.4 67.7 55.9 80.2 97.1 1988 66.8 85.1 81.3 69.8 73.0 72.5 64.4 34.5 70.7 57.1 78.7 102.1 1989 68.1 85.8 77.3 73.3 73.1 72.6 63.6 32.6 72.3 56.1 78.5 101.4 1990 71.2 82.4 71.9 70.2 70.5 71.8 60.6 31.5 73.4 57.3 76.6 100.0 1991 72.5 76.9 66.7 61.2 68.6 71.9 59.0 32.9 70.8 59.5 72.6 97.3 1992 72.0 77.0 65.7 61.6 68.9 73.6 58.7 34.0 70.9 62.2 63.2 98.1 1993 71.3 76.4 69.8 71.8 67.0 76.3 57.7 36.3 70.6 65.2 69.6 98.2 1994 74.9 81.9 77.0 79.6 70.9 78.9 60.4 39.4 76.3 68.4 80.3 101.1 1995 81.3 88.0 84.3 82.1 74.8 80.3 65.0 41.5 83.2 75.2 88.2 102.9 1996 84.9 88.9 82.3 76.3 76.5 82.2 64.6 42.8 81.2 75.3 84.2 100.8 1997 90.2 92.3 84.3 78.7 80.7 79.5 63.9 45.8 85.2 78.3 80.9 100.0 1998 94.4 87.0 86.7 83.2 82.8 78.4 65.2 50.4 86.2 78.9 81.8 100.0
TFP is expressed relative to a base of U.S.A in each year =100
1980 65.5 82.6 92.0 68.6 77.5 59.3 64.9 26.8 61.7 59.6 71.5 100.0 1981 60.6 73.5 86.7 65.1 75.8 60.2 62.9 28.7 60.4 56.6 68.1 100.0 1982 60.7 81.3 78.0 64.5 77.3 64.1 64.2 31.0 63.4 56.8 71.3 100.0 1983 60.9 82.4 80.1 65.7 78.1 68.8 63.2 33.1 67.4 61.1 77.3 100.0 1984 58.6 82.2 80.1 66.0 75.6 69.0 62.6 34.0 69.4 63.4 79.7 100.0 1985 62.7 86.8 81.5 66.2 76.2 70.8 64.0 34.1 70.5 55.6 81.1 100.0 1986 66.8 90.2 82.9 65.9 76.3 71.6 66.2 35.9 72.2 55.4 84.4 100.0 1987 65.7 83.1 81.8 67.8 73.3 72.6 65.1 34.0 69.3 57.7 81.8 100.0 1988 65.3 82.9 79.5 68.2 71.6 71.0 62.5 33.6 69.0 56.1 76.4 100.0 1989 67.2 84.2 76.1 72.2 72.2 71.7 62.4 32.0 71.2 55.5 76.9 100.0 1990 71.2 82.4 71.9 70.2 70.5 71.8 60.6 31.5 73.4 57.3 76.6 100.0 1991 74.4 79.5 68.7 62.9 70.6 73.8 61.0 33.9 72.9 60.9 75.2 100.0 1992 73.1 79.3 67.3 62.7 70.3 74.8 60.4 34.9 72.3 63.0 65.1 100.0 1993 72.2 78.7 71.5 73.0 68.3 77.5 59.4 37.2 71.9 66.1 71.9 100.0 1994 73.6 81.9 76.5 78.6 70.5 77.8 60.4 39.2 75.6 67.4 80.6 100.0 1995 78.5 86.6 82.4 79.9 73.2 77.8 64.1 40.6 81.1 72.7 87.4 100.0 1996 83.6 89.6 82.2 75.8 76.3 81.2 65.4 42.8 81.0 74.1 85.6 100.0 1997 89.5 94.0 84.9 79.0 81.2 79.2 65.5 46.2 85.9 77.7 83.4 100.0 1998 93.4 88.9 87.4 83.4 83.3 77.9 67.1 50.8 87.0 78.0 84.9 100.0 Note: 1) Aut: Austria, Bel: Belgium, Can: Canada, Fin: Finland, Fra: France, Ita: Italia, Kor:
Korea, Nld: Netherlands, Nor: Norway, Swe: Sweden
Eui-Seok Yang
As a result, the productivity gaps were narrowed down within less than 20 percent range, except for Italy (65.2) and Korea (50.4). The diminishing trends of TFP differences imply that there exists a stable convergence in the TFP movement in the manufacturing sector over time and across countries. The United States was also the leader in the productivity comparisons for ISIC 37 (Basic Metals and Fabricated Metal Products).
Broadly speaking, these new estimates of TFPs provide clear evidences on that during the 1980s and 1990s, there existed large and persistent TFP differences across OECD countries in the manufacturing sector as a whole and in several specific industries. The TFP differences are consistent with Harrigan's (1997) statement "that there exist systematic differences across countries in industry outputs in terms of TFP." And productivity comparisons by industry present more clearly the catch-ups and the convergence of the industry productivity.
In ISIC 35 (Chemical, Rubber, Plastics and Fuel Products), Belgium and France were co-leaders in the productivity in termof TFP. The position of Belgium remained untouched until 1990, while France lost its position as a leader after 1985. Italy took over the place of France and showed the high productivity of the industry until 1990. After 1990, there were several catch-upsin productivity among some countries such as Belgium, the United State and Austria. In particular, it is worth noting the catch-up of Korea, which recorded a rapid increase in the productivity from 66.0 in 1980 to 103.7 in 1998. Even though Korea took the first place just one time at 1998, Korea's growing trend of the productivity overwhelmed other countries under comparison.
Total Factor Productivity Comparison in the Energy Intensive Manufacturing Industries
Figure 3.2 TFP Trends of OECD Countries ISIC 35: Chemical and Fuel Products
0.0 30.0 60.0 90.0 120.0 150.0 180.0
19 80 19 82
19 84 19 86
19 88 19 90
19 92 19 94
19 96 19 98
Aut Bel Can Fin Fra GBR Ita Kor Nld Nor Swe Usa
Figure 3.3 TFP Trends of OECD Countries ISIC 36: Other Non-Metallic Products
0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0
198 0 198 2
198 4 198 6
198 8 199 0
199 2 199 4
199 6 199 8
Aut Bel Can Fin Fra GBR Ita Kor Nld Nor Swe Usa
Eui-Seok Yang
Figure 3.4 TFP Trends of OECD Countries ISIC 37: Basic Metals & Fabricated Products
0.0 20.0 40.0 60.0 80.0 100.0 120.0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998
Aut Bel Can Fin Fra GBR Ita Kor Nld Nor Swe Usa
In ISIC 36 (Other Non-Metallic Mineral Products), Canada and the United States showed relatively high TFPs over last 18 years. Although two countries experienced decreasing productivity in the early 1990s, the overall productivity levels were approximately 20 percent higher than in the European countries, excluding the United Kingdom and Italy. Italy recorded stagnating productivity after 1988, while United Kingdom registered the lowest productivity level before 1992, excepting Korea.
In ISIC 37 (Basic Metals and Fabricated Metal Products), the United States was the only frontier country during 1980-1995. U.S. productivity in this industry fluctuated over time, but registered big gaps over the next countries such as Canada and Belgium. In particular, the productivities of European countries (Austria, United Kingdom, Finland, Netherlands and Sweden) were low in the same period. After 1995, however, Belgium took the frontier position of the industry and other European countries also succeeded in narrowing down the productivity difference from the frontier country. The United Kingdom especially improved its position in this industry productivity from 35.7 in 1980 to 80.1 in 1995. As of the end of 1998, Belgium, Canada
Total Factor Productivity Comparison in the Energy Intensive Manufacturing Industries
and the United States are the frontier countries in this industry.
Table 3.2: Total Factor Productivity (TFP) ISIC 35: Chemical, Rubber, Plastics and Fuel Products
YEAR Aut Bel Can Fin Fra U.K Ita Kor Nld Nor Swe U.S.A TFP is expressed relative to a base of U.S.A in 1990 =100
1980 74.0 100.7 66.0 81.5 103.0 79.2 92.0 66.0 47.5 69.1 75.4 84.9 1981 67.0 85.5 59.3 80.8 103.0 76.4 87.5 61.9 43.8 57.6 62.4 86.9 1982 65.1 98.4 48.3 73.8 98.1 75.6 88.6 63.7 43.7 59.8 68.8 81.6 1983 66.9 104.3 51.2 78.9 99.5 85.0 90.7 68.3 53.2 65.3 74.7 83.5 1984 65.1 126.5 52.9 80.5 100.6 86.9 95.2 73.7 59.6 80.1 77.6 81.5 1985 66.2 134.1 53.2 83.4 99.4 89.8 97.8 72.5 58.3 71.2 82.9 83.3 1986 81.9 143.1 59.4 85.6 87.0 91.8 108.3 76.9 59.2 63.5 104.0 84.3 1987 77.9 121.8 60.4 81.1 87.7 98.2 109.8 71.2 55.8 73.2 90.4 91.5 1988 82.8 128.1 70.6 75.9 93.4 101.4 110.1 73.9 64.7 66.0 91.4 102.8 1989 81.8 124.2 64.3 82.9 98.1 102.6 110.9 64.0 63.4 56.6 89.1 101.8 1990 88.0 114.2 63.4 81.4 100.4 92.3 105.9 50.0 59.4 60.0 80.2 100.0 1991 83.8 97.0 60.9 69.2 91.9 86.7 94.7 56.9 54.9 57.2 76.5 95.3 1992 75.4 86.4 53.4 58.8 81.9 80.2 84.4 59.0 51.0 57.4 56.0 93.1 1993 69.5 72.3 53.9 60.7 75.8 80.5 75.4 63.0 51.3 66.4 66.0 91.8 1994 71.6 80.2 58.5 69.9 76.0 82.4 80.7 71.1 59.4 70.3 71.6 94.7 1995 77.8 93.7 65.6 63.1 79.0 85.4 89.8 76.3 69.6 76.6 77.3 96.0 1996 83.4 98.3 66.2 62.2 79.5 86.0 88.7 79.6 64.0 87.4 74.4 94.7 1997 96.3 101.9 66.1 64.6 83.1 80.9 86.1 92.5 68.7 79.8 74.7 95.3 1998 101.4 89.6 71.7 68.3 83.5 78.1 87.8 103.7 66.5 77.6 75.3 93.8
TFP is expressed relative to a base of U.S.A in each year =100
1980 87.4 118.2 76.7 95.4 127.3 93.8 105.1 77.5 55.6 81.8 89.0 100.0 1981 77.3 98.2 67.5 92.6 123.1 88.4 98.5 71.3 50.2 66.5 72.0 100.0 1982 79.8 120.5 59.0 90.4 120.8 92.6 108.2 77.9 53.5 73.3 84.3 100.0
Eui-Seok Yang
1983 80.1 124.9 61.3 94.5 118.7 101.8 108.9 81.8 63.7 78.1 89.5 100.0 1984 79.9 155.2 64.7 98.6 124.8 106.8 116.1 90.3 73.0 98.4 95.3 100.0 1985 79.5 160.9 63.7 100.0 120.1 107.8 116.9 86.9 69.9 85.5 99.5 100.0 1986 97.1 169.7 70.3 101.5 103.5 108.9 128.2 91.1 70.2 75.3 123.4 100.0 1987 85.3 133.1 65.7 88.5 97.4 107.5 118.8 77.5 61.0 80.1 98.9 100.0 1988 80.7 124.5 68.4 73.8 92.6 98.9 106.0 71.6 62.9 64.4 89.0 100.0 1989 80.5 121.9 62.9 81.4 98.1 101.0 107.9 62.7 62.2 55.7 87.6 100.0 1990 88.0 114.2 63.4 81.4 100.4 92.3 105.9 50.0 59.4 60.0 80.2 100.0 1991 87.7 101.8 64.3 72.6 94.1 90.6 100.6 59.9 57.6 59.8 80.1 100.0 1992 80.6 92.8 58.0 63.3 83.9 85.5 92.9 63.8 54.9 61.3 60.0 100.0 1993 75.1 78.8 59.7 66.5 77.1 86.8 85.3 69.2 56.0 71.8 71.7 100.0 1994 74.8 84.7 63.0 74.2 74.0 86.0 89.1 75.7 62.9 73.7 75.3 100.0 1995 80.2 97.5 69.8 66.2 74.7 87.7 98.4 80.2 72.7 79.1 80.1 100.0 1996 87.0 103.6 71.8 66.2 74.8 89.2 99.6 85.0 67.8 91.0 78.1 100.0 1997 99.7 106.8 71.6 68.6 76.2 83.2 97.1 98.1 72.4 82.6 77.8 100.0 1998 106.2 95.2 79.1 73.6 76.7 81.3 101.2 111.3 71.2 81.4 79.6 100.0
Table 3.3: Total Factor Productivity (TFP) ISIC 36: Other Non-Metallic Mineral Products
YEAR Aut Bel Can Fin Fra U.K Ita Kor Nld Nor Swe U.S.A TFP is expressed relative to a base of U.S.A in 1990 =100
1980 87.0 89.7 97.4 83.2 73.5 49.2 86.3 25.1 62.7 83.6 62.4 99.6 1981 80.4 76.1 92.6 77.7 67.9 46.0 80.2 23.7 55.3 83.9 56.2 91.2 1982 79.5 78.5 85.7 85.8 67.0 49.0 72.6 23.7 53.0 83.3 60.5 82.3 1983 77.4 79.4 95.5 89.3 70.5 54.7 69.2 29.1 56.3 92.8 64.7 92.4 1984 80.7 85.2 98.9 81.9 67.6 55.1 66.3 30.5 66.0 87.6 67.5 99.5 1985 82.4 81.5 108.2 75.5 67.2 52.3 62.5 30.1 67.3 75.5 70.4 104.0 1986 82.0 92.1 115.0 74.8 81.0 53.1 67.3 31.0 76.7 78.9 77.6 110.2 1987 85.1 95.7 124.1 82.3 85.6 58.3 70.5 31.4 75.4 81.7 79.4 101.2
Total Factor Productivity Comparison in the Energy Intensive Manufacturing Industries
1988 87.7 96.7 123.1 91.5 88.8 62.9 71.8 37.2 79.4 73.9 81.0 98.5 1989 88.2 96.3 115.6 100.9 86.5 59.6 70.3 36.4 77.8 71.8 81.3 101.4 1990 90.5 90.2 102.8 87.8 82.0 57.5 69.2 37.4 77.5 79.0 81.5 100.0 1991 94.5 87.8 87.6 77.9 83.3 56.7 70.5 39.4 71.0 84.7 76.8 95.2 1992 96.4 98.4 91.1 69.0 91.1 63.1 74.9 39.1 67.6 81.0 67.3 102.9 1993 96.3 102.7 97.8 82.2 89.8 71.9 74.9 38.0 67.8 92.0 66.9 100.2 1994 105.3 106.1 107.2 88.0 102.0 82.5 76.6 36.2 77.5 97.5 76.9 108.9 1995 97.6 114.1 112.7 86.8 98.3 94.5 78.2 34.0 83.1 108.9 86.1 112.2 1996 110.9 108.0 120.2 86.6 96.6 99.7 76.4 37.5 80.5 109.7 87.0 108.0 1997 113.8 112.3 124.1 96.1 96.1 94.6 76.1 39.9 82.3 114.2 85.7 116.4 1998 109.1 102.5 122.2 104.0 98.1 89.6 76.1 42.5 84.2 113.6 89.6 114.1
TFP is expressed relative to a base of U.S.A in each year =100
1980 86.2 88.9 96.9 82.4 69.3 48.1 84.9 24.8 62.0 83.1 58.4 100.0 1981 87.7 83.0 101.1 84.7 72.5 49.9 87.3 25.8 60.2 91.6 59.8 100.0 1982 96.9 95.6 104.3 104.6 82.7 59.9 88.7 28.9 64.6 101.5 74.7 100.0 1983 83.7 85.9 103.4 96.7 76.1 59.1 74.9 31.5 61.0 100.5 69.9 100.0 1984 80.5 85.0 98.9 81.6 65.4 54.6 65.8 30.4 65.7 87.5 65.3 100.0 1985 78.8 77.8 103.5 72.1 62.6 49.6 59.5 28.8 64.2 72.3 65.6 100.0 1986 74.2 83.2 104.1 67.6 71.9 47.7 60.6 28.0 69.2 71.4 68.8 100.0 1987 84.0 94.5 122.5 81.2 84.0 57.4 69.5 31.0 74.4 80.7 77.9 100.0 1988 88.9 97.9 124.7 92.6 88.9 63.4 72.5 37.6 80.3 74.9 81.0 100.0 1989 86.8 94.6 113.7 99.1 83.9 58.4 69.0 35.8 76.4 70.6 78.8 100.0 1990 90.5 90.2 102.8 87.8 82.0 57.5 69.2 37.4 77.5 79.0 81.5 100.0 1991 99.8 92.8 92.4 82.3 89.8 60.2 74.6 41.5 75.0 89.3 82.8 100.0 1992 94.0 96.1 88.8 67.4 90.5 62.0 73.3 38.1 66.1 79.0 67.0 100.0 1993 96.3 102.7 97.8 82.3 90.7 72.2 75.0 38.0 67.9 92.0 67.7 100.0 1994 96.7 97.3 98.4 80.7 93.2 75.7 70.3 33.3 71.1 89.5 70.3 100.0 1995 86.9 101.7 100.4 77.3 87.4 84.1 69.7 30.3 74.1 97.0 76.6 100.0 1996 102.7 100.0 111.3 80.2 89.7 92.4 70.8 34.8 74.6 101.7 80.8 100.0 1997 98.3 97.2 107.1 83.2 85.4 82.4 66.0 34.3 71.3 98.6 76.2 100.0 1998 96.7 91.2 108.1 92.5 92.7 81.0 68.2 37.4 75.0 100.6 84.6 100.0
Eui-Seok Yang
Table 3.4: Total Factor Productivity (TFP) ISIC 37: Basic Metals and Fabricated Metal Products
YEAR Aut Bel Can Fin Fra U.K Ita Kor Nld Nor Swe U.S.A
TFP is expressed relative to a base of U.S.A in 1990 =100
1980 68.1 80.9 92.8 63.1 69.2 35.7 58.9 20.4 53.2 81.3 68.9 108.8 1981 59.2 72.5 86.5 54.4 64.5 38.0 54.5 24.7 50.5 63.6 59.8 108.8 1982 63.4 72.6 72.4 58.8 66.6 39.8 52.2 25.9 54.7 56.3 60.7 97.9 1983 62.2 76.8 77.7 63.0 68.0 46.2 49.2 29.1 55.0 72.5 67.1 90.5 1984 62.0 77.7 84.4 62.7 68.5 47.9 50.7 30.1 62.7 86.6 75.7 98.0 1985 70.8 83.7 86.7 60.8 67.7 48.1 48.8 31.7 64.5 64.8 75.8 94.9 1986 69.2 84.1 82.4 61.9 69.5 48.4 50.5 37.0 61.9 58.4 78.6 96.7 1987 68.6 79.7 86.5 63.6 67.5 47.0 51.4 40.0 61.5 60.6 78.8 96.2 1988 73.4 98.0 89.9 71.8 74.0 50.6 55.5 38.0 67.6 78.2 77.1 104.0 1989 75.7 106.6 83.9 80.0 77.5 49.7 55.6 38.6 73.4 80.9 77.1 103.2 1990 74.6 95.9 74.8 68.0 70.2 52.4 52.3 36.2 71.6 65.1 79.9 100.0 1991 74.4 86.0 68.9 65.4 70.1 56.8 52.9 36.2 70.1 64.4 76.1 94.9 1992 71.5 91.9 69.5 72.4 71.6 63.1 55.4 34.7 67.6 65.9 65.3 94.7 1993 68.3 87.7 74.6 88.4 68.9 65.6 57.5 36.7 63.8 73.8 73.3 97.2 1994 74.0 97.1 84.5 97.2 76.4 71.5 63.0 36.3 70.3 81.5 88.9 102.4 1995 85.1 108.6 95.9 99.7 85.4 80.1 72.0 39.8 77.7 97.4 101.1 104.7 1996 89.4 103.7 96.7 89.9 86.1 80.0 70.7 38.8 72.2 90.8 94.6 102.9 1997 93.4 111.5 100.8 87.1 89.3 77.4 68.6 41.2 76.3 93.5 90.5 101.4 1998 97.7 107.3 102.9 82.7 92.9 78.8 68.3 39.8 76.8 97.3 91.5 101.7
TFP is expressed relative to a base of U.S.A in each year =100
1980 62.6 75.2 85.4 57.4 63.4 33.0 53.3 18.7 48.8 74.6 63.4 100.0 1981 54.4 67.2 79.5 49.6 59.1 35.1 49.5 22.7 46.3 58.3 54.9 100.0 1982 64.8 74.0 73.9 60.2 68.1 40.6 53.5 26.6 55.9 57.5 62.0 100.0 1983 68.7 84.6 85.8 69.8 75.2 51.0 54.6 32.3 60.8 80.1 74.2 100.0 1984 63.2 79.5 86.1 63.9 69.9 49.0 51.5 30.5 64.0 88.3 77.3 100.0
Total Factor Productivity Comparison in the Energy Intensive Manufacturing Industries
1985 74.6 88.4 91.4 64.0 71.3 50.7 51.3 33.2 67.9 68.3 79.9 100.0 1986 71.6 87.0 85.3 64.0 71.9 50.1 52.2 38.2 64.0 60.4 81.3 100.0 1987 71.3 82.9 90.0 66.0 70.2 48.9 53.3 41.4 63.9 62.9 81.9 100.0 1988 70.6 94.6 86.5 68.9 71.1 48.7 53.2 36.3 65.0 75.2 74.1 100.0 1989 73.4 103.6 81.4 77.4 75.1 48.3 53.7 37.2 71.1 78.4 74.7 100.0 1990 74.6 95.9 74.8 68.0 70.2 52.4 52.3 36.2 71.6 65.1 79.9 100.0 1991 78.3 90.1 72.5 69.1 73.8 59.7 56.0 38.4 73.9 67.8 80.2 100.0 1992 75.4 96.4 73.2 76.7 75.7 66.5 58.8 37.0 71.4 69.6 68.9 100.0 1993 70.2 89.7 76.6 91.2 70.8 67.3 59.5 38.0 65.6 75.9 75.4 100.0 1994 72.2 94.6 82.5 95.0 74.6 69.7 61.6 35.6 68.7 79.6 86.8 100.0 1995 81.2 103.3 91.5 95.5 81.6 76.3 69.1 38.2 74.2 93.1 96.5 100.0 1996 86.8 100.1 93.9 87.8 83.7 77.5 69.2 38.0 70.2 88.4 92.0 100.0 1997 92.0 109.0 99.3 86.4 88.2 76.0 68.2 41.0 75.3 92.4 89.2 100.0 1998 95.9 104.3 100.9 81.9 91.5 77.0 67.9 39.6 75.6 95.9 90.0 100.0
Conclusion of Productivity Comparison
One important purpose of this paper is to confirm Harrigan's statement
"that there exist systematic differences across countries in industry outputs in terms of TFP that cannot be explained by differences in factor endowments".
Computed by applying the CCD multilateral TFP index, the TFP differences by industry provide several indications in understanding a country's relative productivity level. One remarkable finding shows that there were large productivity differences across countries, but that these differences narrowed over 1980s and 1990s. Especially, the gaps of the industry productivity have fluctuated yearly, but diminished in a very stable manner in the long run. In conclusion, the paper confirms that there are substantial technology differences (TFP differences) in the manufacturing sector as a whole and in 2-digit ISIC manufacturing branches (ISIC 35, ISIC 36 and ISIC 37) among 12 OECD countries. In the manufacturing sector as awhole, the Unites States was the
Eui-Seok Yang
only leader among 12 OECD countries, while in the 2-digit ISIC industries, several countries such as Canada, Belgium and United Kingdom were leading in the industry productivity. Productivity catch-up and convergence were clear over 1980-1998 in each industry. However, to explain fully the catch-ups and convergence across countries and over time, a specific framework is required.
Therefore, the paper investigates this convergence topic in the following.