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Abstract
This article examines the total factor productivity (TFP) growth by decomposing it into technical efficiency and technological change for the 20 service industries in a developing country – Malaysia from 1987 to 1992. On average, the TFP growth of the service industries experienced positive TFP growth of 1.8%. The contributing factors for TFP growth was technical efficiency while technological regress was found to dampen the TFP progress.
Acknowledgements
We would like to thank Mr Nathan and Mr James for their comments and editorial work of this article.
Notes
1 Due to the space constraint the construction of LPs is not shown in this study. For details on Malmquist DEA, see Färe et al . Citation(1994), Coelli Citation(1996) for the guide to DEAP computer program.
2 Certain industries namely shipping, banking, insurance and finance experience quite substantial FDI inflows (Nga, Citation1988).