Estimating Total Factor Productivity and its Components: Evidence from Major manufacturing Industries of Pakistan

This paper estimates the trend in total factor productivity growth for eleven major manufacturing sub sector/industries listed on Karachi Stock Exchange. 1998 to 2007 Malmquist total factor productivity growth indices have been calculated using non parametric Data Envelopment Analysis which also shows TFP growth sources including efficiency change and technical change. The results of this study are showing a mixed trend for all manufacturing sub sectors/industries in terms of TFP, technical efficiency change and technological change. Cement and oil and gas marketing sectors which relatively depicts stable position. Most of the manufacturing industries have gained in terms of technical efficiency but the technical change is putting a negative affect on the productivity growth except few industries