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Malmquist productivity index decompositions: a unifying framework
[journal article]
Abstract In two widely cited but unpublished working papers, Simar and Wilson (1998) and Zofío and Lovell (1998) proposed an alternative decomposition of the Malmquist Productivity Index, which retained what seemed to be the strongholds of previous proposals with regard to the contribution of technological a... view more
In two widely cited but unpublished working papers, Simar and Wilson (1998) and Zofío and Lovell (1998) proposed an alternative decomposition of the Malmquist Productivity Index, which retained what seemed to be the strongholds of previous proposals with regard to the contribution of technological and efficiency change to productivity change. Namely, a technical change term with regard to the best practice (VRS) technology which is to be found in Ray and Desli (1997) and a scale efficiency change term that illustrates a firm’s situation with regard to optimal scale (benchmark technology), Färe, Grosskopf, Norris and Zhang (1994). Attaining this objective required the introduction of an additional term in the Malmquist Productivity Index decomposition, which would reflect the scale bias of technical change. It is our objective to provide economic rationale for this term within a theory of production context, the existing decompositions and recent articles that further elaborate on this issue. The ideas are illustrated using productivity trends in 17 OECD countries.... view less
Classification
Economic Statistics, Econometrics, Business Informatics
Political Economy
Free Keywords
Productivity Change; Malmquist Indices; Distance Functions
Document language
English
Publication Year
2007
Page/Pages
p. 2371-2387
Journal
Applied Economics, 39 (2007) 18
DOI
https://doi.org/10.1080/00036840600606260
Status
Postprint; peer reviewed
Licence
PEER Licence Agreement (applicable only to documents from PEER project)