Total factor productivity and growth in Turkey

TOTAL FACTOR PRODUCTIVITY AND GROWTH IN TURKEYD LEK ÖZDENSUMMARYThe factos of production are limited while the needs of human beings are not. It isnecessary to use these resources efficiently in order to satisfy all those needs. Productivitygrowth is associated with efficiency. Increased productivity will increase production and theneconomic growth.Technology is also vital importance for productivity. A country can either develop andimprove technology itself or import it. Many developing countries like Turkey have totransfer technology due to the lack of capital stock.Turkey followed an import substitution development strategy until 1980, thus the levelof technology was limited. There were many small scale companies. With the introduction ofexport-oriented development strategy in 1980, transfer of technology through trade becameeasier and that caused significant productivity growth.This study aims to analyse partial and total factor productivity in manufacturingindustry and its sub-sectors in Turkey. Initially, definition and measurement of productivityare explained and the main growth models are summarised.The study covers the 1973-2001 period and carries out productivity analyses inmanufacturing sectors. Using the Solow growth model, a single model is estimated for eachsector and then productivity of labour and capital together with total factor productivity arecalculated. The analyses are repeated for public and private sectors for comparison.