Iran's Food Industry Value-Added Growth Accounting: The Endogenous Growth Theory Approach

Document Type : Scientific paper

Authors

1 Ph.D. Student, Department of Economics, Firoozkooh Branch, Islamic Azad University, Firoozkooh, Iran

2 Department of Economic, Firoozkooh Branch, Islamic Azad University, Firoozkooh, Iran

3 Department of Economics, Firoozkooh Branch, Islamic Azad University, Firoozkooh, Iran

Abstract

The purpose of this study is to account for the value-added and total factor productivity (TFP) growth of 17 food and beverage industries with the classification of two-digit ISIC by the endogenous growth theory approach in the period of 2003 to 2019. The results of the research showed that in the production process, the labor force and capital stock are complementary and the yield trend is upward relative to the scale, which is compatible with the endogenous growth theory. The analysis of value-added growth indicated that classical production inputs (capital stock and labor force) play a dominant role in the growth of food and beverage industries. However, a considerable portion of their contribution to the value-added growth is due to the mix with technology. The findings showed that technology has affected the productivity of the labor force more than the productivity of capital stock and on this basis, the share of labor force-embedded technology in value-added growth is high and the share of capital-embedded technology is low. In addition, the traditional growth accounting method in estimating the share of total productivity is associated with an underestimation error, and in the new growth accounting theory, the contribution of free technology to growth is significant.
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Macroeconomics Research Letter
Volume 18, Issue 39
December 2023
Pages 7-30

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History

  • Receive Date: 28 January 2023
  • Revise Date: 05 June 2023
  • Accept Date: 05 August 2023

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