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Accounting Total Factor Productivity of FDI Firm in Nepal

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  • Bista, Raghu

Abstract

Economic Reforms towards economic liberalization and privatization is a good prescription to attract FDI in productive sectors. In 1990, Nepal liberalized her economy to create investment environment and destination of FDI by minimizing structural and institutional barriers and constraints for promoting TFP of productive sectors. This study investigates empirically what is TFP growth of FDI in Nepal in 1990 after economic liberalization process. We use econometric model based on Cobb Douglas production function and theoretical model of TFP growth accounting method. The econometric and non-parametric TFP estimation provides mostly positive TFP growth of FDI firms in Nepal. Few cases were influenced by political and security disturbances. Almost positive TFP growths have increasing productivity but there are still lower than expectation. There are still problems of massive inferior labor, no significant technological and financial transfer and poor business environment. Issues of continuity and stability between two periods indicate unpredictable situation of productivity.

Suggested Citation

  • Bista, Raghu, 2019. "Accounting Total Factor Productivity of FDI Firm in Nepal," MPRA Paper 100279, University Library of Munich, Germany, revised 10 Feb 2019.
    • Handle: RePEc:pra:mprapa:100279
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    References listed on IDEAS

    as
    1. de Mello, Luiz R, Jr, 1999. "Foreign Direct Investment-Led Growth: Evidence from Time Series and Panel Data," Oxford Economic Papers, Oxford University Press, vol. 51(1), pages 133-151, January.
    2. Bista, Raghu, 2005. "Foreign Direct Investment in Nepal," MPRA Paper 100194, University Library of Munich, Germany, revised 29 Mar 2005.
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    4. Journal of Economics Library, 2016. "New Economics Books," Journal of Economics Library, KSP Journals, vol. 3(2), pages 362-410, June.
    5. Bista, Raghu, 2011. "FDI and Corporate Social Responsibility in Nepal," MPRA Paper 100110, University Library of Munich, Germany, revised 19 Jan 2011.
    6. Journal of Economics Library, 2016. "New Economics Books," Journal of Economics Library, KSP Journals, vol. 3(1), pages 165-213, March.
    7. Bista, Raghu, 2011. "Foreign Direct Investment and BIPPA In Nepalese Economy: A Policy Issue Paper," MPRA Paper 100276, University Library of Munich, Germany, revised 01 Jan 2011.
    8. Journal of Economics Library, 2016. "New Economics Books," Journal of Economics Library, KSP Journals, vol. 3(4), pages 664-711, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    FDI; TFP growth; economic reform; liberalization;
    All these keywords.

    JEL classification:

    • C54 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Quantitative Policy Modeling
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J5 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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