This paper postulates that productivity change can take place in a developing country experiencing changes in the composition of its capital inputs. It develops a model for assessing this type of productivity change. Hong Kong is used as our case study. The aggregate capital stock productivity change has contributed on average to about 14% of the output growth in HK over 1966-1996. It represents about 20% of the aggregate TFP growth in HK over the period 1966-1986, rising to above 90% over 1986-1996. The aggregate TFP contribution to HK's output growth over 1991-1996 was attributed almost entirely to capital stock productivity change. Contribution of the disembodied component of the residual TFP growth to output growth has concomitantly declined to a negative level over the period under study. The paper points to the role of capital stock productivity improvement in sustaining HK's economic growth.
- Capital stock
- Productivity change
- Quality adjustment
VOON, J. P. T., & CHEN, K. Y. . E. (2003). Contributions of capital stock improvement to economic growth : the case of Hong Kong. Journal of Asian Economics, 14(4), 631-644. https://doi.org/10.1016/S1049-0078(03)00099-X