The Impacts of Total Factor Productivity (TFP) on the Growth of the Iran's Main Economy Sectors



This study analyzes the contribution of the Sectoral Total Factor Productivity Growth (TFPG) and the input's growth to the Iran's economy sectors growth during 1345 -1383. The major findings show that the average contribution of TFP growth to non-oil output's growth during first, second and third development plans has been 39.5%, 12.2% and 24.8% respectively, amounting to (as estimated) 32.6% during the fourth plan. During the development plans after revolution, the average contribution of TFP growth in service sector to non-oil GDP growth has been more and in agricultural sector less than the other ones. Even though, the average growth of capital stock and sectoral value-added before the revolution has been much more than those after revolution, but the contribution of TFP to non-oil economic growth in the aftermath of the 1979 revolution(i.e. 18.23%) has been more than the ones before the revolution (i.e. 10.9%). Reduction in the growth of capital stock, sectoral value-added and factors productivity during second development plans imply the high vulnerability of economic growth and TFP to external shocks.
JEL Classification : L1, D2, O4