Abstract
The novelty of the new theory of economic growth essentially lies in explaining the growth of total factor productivity (TFP) - the efficiency in utilization of both capital and human resources and degree of technological advancement associated with economic growth. This paper presents the dual estimates of TFP growth for large scale manufacturing (LSM) sector of Pakistan at disaggregate level (i.e. for consumer goods industries, intermediate goods industries and capital goods industries). Most previous growth accounting studies on Pakistan have followed the primal approach, which depends heavily on the national income accounts. The dual approach, in contrast, allows
independent price information to play a role. We find that there are significant differences between TFP series calculated using the two approaches (primal and dual approach). We trace the reason for this difference to inconsistencies between the data on user cost of capital and physical stocks of capital.
Sadia Majeed, Qazi Masood Ahmed, Muhammad Sabihuddin Butt. (2014) TOTAL FACTOR PRODUCTIVITY IN PAKISTAN REVISITED: A DUAL APPROACH OF PRODUCTIVITY MEASUREMENT, Journal of Social Sciences & Interdisciplinary Research, Volume 3, Issue 1.
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