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Total factor productivity growth accounting in the construction industry of Singapore

Author

Listed:
  • Mao Zhi
  • Goh Bee Hua
  • Shou Qing Wang
  • George Ofori

Abstract

Total factor productivity (TFP) determines long-term economic growth and is a comprehensive industry-level productivity measure. This paper proposes Jorgenson's method as an appropriate TFP measurement for the construction industry. The method is less restrictive than the conventional Chau's approach, as it does not impose the Hick Neutral Technical Change assumption. Jorgenson's method is then applied to estimate TFP growth in the construction industry of Singapore over 1984-1998. TFP growth is found down by 1.53% per annum over this period, indicating that the performance of TFP in the construction industry lags behind the rest of economy. TFP growth is also found to be fluctuating over time and tends to move in tandem with the construction business cycle. As a monitor of progress towards TFP achievement, factors influencing TFP growth in the construction industry of Singapore over 1984-1997 are identified. Seven factors are found to be significantly related to TFP growth. Among them, economies of scale, R&D by the industry, investment allowance granted and labour unions are leading contributors to TFP growth; while foreign worker, construction accidents and pre-cast are major hampers. The general methodology presented in this study can be applied to other countries. Future studies are required to find appropriate indicators for factors unquantified.

Suggested Citation

  • Mao Zhi & Goh Bee Hua & Shou Qing Wang & George Ofori, 2003. "Total factor productivity growth accounting in the construction industry of Singapore," Construction Management and Economics, Taylor & Francis Journals, vol. 21(7), pages 707-718.
    • Handle: RePEc:taf:conmgt:v:21:y:2003:i:7:p:707-718
    DOI: 10.1080/0144619032000056126
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    Citations

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    Cited by:

    1. Hao Lu & Qin Zhang & Qinghong Cui & Yuanyuan Luo & Pardis Pishdad-Bozorgi & Xiancun Hu, 2021. "How Can Information Technology Use Improve Construction Labor Productivity? An Empirical Analysis from China," Sustainability, MDPI, vol. 13(10), pages 1-13, May.
    2. Dolage, D.A.R. & Sade, Abu Bakar & Ahmed, Elsadig Musa, 2010. "The influence of Flexible Manufacturing Technology adoption on productivity of Malaysian manufacturing industry," Economic Modelling, Elsevier, vol. 27(1), pages 395-403, January.
    3. Segundo Camino‐Mogro & Natalia Bermudez‐Barrezueta, 2021. "Productivity determinants in the construction sector in emerging country: New evidence from Ecuadorian firms," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2391-2413, November.
    4. Naser, Nazar & Saeedeh, Delfan & Farhad, Zand, 2015. "Reviewing morphologic specifications of acorn leaves and fruits in lorestan province," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 5(06), pages 1-8, June.
    5. Rita Yi Man Li & Kwong Wing Chau & Frankie Fanjie Zeng, 2019. "Ranking of Risks for Existing and New Building Works," Sustainability, MDPI, vol. 11(10), pages 1-26, May.
    6. Kamarudin, Othman & Amir Hussin, Baharuddin, 2015. "The total factor productivity in strategic food crops industry of Malaysia," Asian Journal of Agriculture and Rural Development, Asian Economic and Social Society (AESS), vol. 5(05), pages 1-13, May.
    7. Sungjin Ahn, 2022. "Derivation of Risk Factors to Quantify the Risk of Safety Accidents for Small and Medium-Sized Enterprises in Construction Industry," Sustainability, MDPI, vol. 14(12), pages 1-14, June.
    8. Kamarudin Othman & Amir Hussin Baharuddin, 2015. "The total factor productivity in strategic food crops industry of Malaysia," Asian Journal of Agriculture and rural Development, Asian Economic and Social Society, vol. 5(5), pages 124-136, May.
    9. Gui Ye & Yuhe Wang & Yuxin Zhang & Liming Wang & Houli Xie & Yuan Fu & Jian Zuo, 2019. "Impact of Migrant Workers on Total Factor Productivity in Chinese Construction Industry," Sustainability, MDPI, vol. 11(3), pages 1-18, February.
    10. Greco, Marco & Grimaldi, Michele & Locatelli, Giorgio & Serafini, Mattia, 2021. "How does open innovation enhance productivity? An exploration in the construction ecosystem," Technological Forecasting and Social Change, Elsevier, vol. 168(C).
    11. Abdoulaye Kané, 2022. "Measurement of total factor productivity: Evidence from French construction firms," EconomiX Working Papers 2022-9, University of Paris Nanterre, EconomiX.

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