Comparative productivity performance in manufacturing in South and East Asia, 1960–93

Abstract

This paper focuses on comparative productivity performance in manufacturing in five major Asian economies: China, India, Indonesia, Korea and Taiwan. Using conversion factors derived according to an industry of origin approach, comparisons of real labour productivity are made, with the world productivity leader, the USA, as reference country in a star comparison. Benchmark level comparisons are extrapolated with time series. A distinction is made between Korea and Taiwan, which have experienced rapid productivity catch‐up, and China, India and Indonesia, where relative productivity showed little change throughout the 1980s. Besides aggregate comparisons, the paper provides sectoral breakdown for 13 branches of manufacturing. The analysis at branch level reveals similar patterns and trends to those at the aggregate level. Catch‐up accounting shows that changes in the structure of employment within manufacturing contributed little to aggregate catch‐up. Labour productivity catch‐up in Korea and Taiwan is primarily due to catch‐up in capital intensity, but this process is still far from complete.