Total Factor Productivity and Sources of Long-Term Growth in ...

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The study period can be divided into pre-reform period (1975-86) and reform
period (1987-96). For all study period (1975-96), the mean value of total factor
productivity index is 0.80 and significant annual growth rate in total factor
productivity is 0.016. The mean value of total factor productivity increased from
0.69 in the pre-reform era to 0.93 in the reform era. While significant annual
growth rates in total factor productivity is decreased from 0.007 to –0.0419 in the
pre-reform and reform era respectively.
Figure 1 presents TFP curve and linear trend. This figure indicates
long-term increasing growth of total factor productivity index in the Egyptian
agricultural sector during the time period 1975-96. Otherwise the TFP index was
fluctuating the whole time of the study period.
The comparison between the TFP for the Egyptian economy and TFP
for Egyptian agricultural sector has been illustrated in figure 2. The TFP for
Egyptian economy was greater than the TFP for the Egyptian agricultural sector
until the year 1990. However, this relationship has been reversed after 1990.
TOTAL FACTOR PRODUCTIVITY DECOMPOSITION
In the productivity decomposition analysis, there are many relevant
variables represent sources of growth such as:
(1) Proxy variables for the technological change and
adoption of new technology like public and private research,
education and agricultural extension.
(2) Variables measuring the price and economic policy for
example indexes of real wage rate and indexes of agricultural price
support.
(3) Variables reflect weather and location effects.
(4) The time trend variable.
Relying on decomposition the productivity analysis, estimates of productivity
elasticities for the relevant variables can be obtained. In addition to the statistical
productivity decomposition, there are many methods such as: imputationaccounting
method and statistical meta-function methods. 18
In order to identify the determinants of TFP, the TFP index variable has
been regressed on variables representing technological change, education and
agricultural extension, economic reform policies, and time trend. These
determinants represent the sources of agricultural economic growth.
Table 5. represents the used variables in decomposition of total factor
productivity such as : annual agricultural wages , number of workers , number
of tractors , number of harvesters and threshers , public fixed investment ,trend
variable, and dummy variable.