The widely applied non-parametric Malmquist Productivity Index (MPI) is beset by Unboundedness under variable returns to scale technology assumptions. Potentially, this leads to inaccurate productivity measurements. The Malmquist Total Factor Productivity Index (MTFP) has been proposed as an alternative index for overcoming Unboundedness and has seen applications at the firm level. I extend the body of knowledge on these two indexes by applying them both to aggregate level data to examine the extent to which they are beset by Unboundedness and furthermore by decomposing the MTFP. Furthermore I address the pervasive gap in the literature on the relative performance of global regions. This level of study has received little attention while much work has been done on the relative performance of individual nations. I find that the MTFP completely overcomes Unboundedness whereas the 5% of distance functions computed with the MPI are subject to the problem. In addition there is a statistically significant difference between the variable returns to scale (VRS) MTFP and MPI. There is a similarly significant difference between the variable returns to scale MTFP and the constant returns to scale MPI that has been widely used as its proxy. Thus I conclude advocating the use of the MTFP where the production relation being examined is best characterised by variable returns to scale technology assumptions. The Far East region was found to have achieved best performance in the 1980 -- 1999 period. There is an indication, albeit tenuous, that the regions with organised economic blocs achieve relatively high levels of performance.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:697395 |
| Date | January 2007 |
| Creators | Adesokan, Muhideen Bolaji |
| Publisher | University of Leicester |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://hdl.handle.net/2381/31122 |
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