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Productivity, technical and efficiency change in Singapore's services sector, 2005 to 2008

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The current study was motivated by statements made by the Economic Strategies Committee that Singapore's recent productivity levels in services were well below countries such as the US, Japan and Hong Kong. Massive employment of foreign workers was cited as the reason for poor productivity levels. To shed more light on Singapore's falling productivity, a nonparametric Malmquist productivity index was employed which provides measures of productivity change, technical change and efficiency change. The findings reveal that growth in Total Factor Productivity (TFP) was attributed to technical change with no improvement in efficiency change. Such results suggest that gains from TFP were input-driven rather than from a ‘best-practice’ approach such as improvements in operations or better resource allocation.

Keywords: D24; L80; Malmquist productivity index; service sector; technical efficiency; total factor productivity

Document Type: Research Article


Affiliations: School of Economics and Finance, Queensland University of Technology, Brisbane,Queensland, Australia

Publication date: May 1, 2013

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