Application of the dynamic array data model of total factor productivity to analyse the contribution of TFO to labor productivity growth in food industry in Vietnam
The objective of the study is to estimate the contribution of total factor productivity (TFP) to labor productivity growth in the food processing and beverage industries in Vietnam. To accomplish this goal, the study estimated TFP by the semi-parametric method proposed by Olley-Pakes (1996) and modified by Levinsohn - Petrin (2003). To consider the dependence of current labor productivity on previous labor productivity in estimating the contribution of TFP and factor productivity to labor productivity, the study developed and used dynamic system model with array data on the relationship between labor productivity with TFP. In the experiment, the study has overcome the indigeneity of the input factors when estimating the production function and TFP by semi-parametric technique. The study uses the General Statistics Office's enterprise survey data from 2010-2017 and has found the contribution of TFP to labor productivity in the food industry, food production and processing subsectors, and the corresponding beverage industry is 90.14%, 92.44%, 80.36%.
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