The Impact of Technical Change on Total Factor Productivity Growth in Manufacturing Industries in Iraq (2016-2020) via the Malmquist Methodology
DOI:
https://doi.org/10.31272/jae.i143.1222Keywords:
Technical change, the Malmquist MethodologyAbstract
Technical change plays an influential role in the growth of total factor productivity in the manufacturing sector in Iraq. This research aims to measure and analyse the impact of technical change on the development of total factor productivity during the period (2016-2020). We have resorted to using the nonparametric programming method to calculate the Malmquist productivity index. According to the Malmquist index, this index is divided into two components: technical change and efficiency change. The research has concluded that total factor productivity growth is not primarily due to technical change. The technical change was positive only in four industrial branches (the food industry, the primary metals industry, the manufacture of composite metal products excluding machinery and equipment, and the electrical appliances industry) out of (13) industrial branches of the manufacturing industry in extensive industrial facilities except for the Kurdistan Region. This means that these branches did not adopt new technology to increase the growth of total worker productivity, and increasing skilled labour through human resource development reduces the skills shortage that hinders the adoption of new technology. The researchers recommend that enabling research and development activities can effectively bring technological progress to these industries. Therefore, efforts should focus on increasing research.
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