Analysis of total factor productivity growth in marine and offshore industry

Abstract

The main motivation behind this paper is to estimate the Total Factor Productivity growth (TFPG) in Marine and Offshore (M&O) industry from 1981 to 2013, and find out the determinants of estimated TFPG in this industry. Using a translog production function, estimated TFPG and its translog index are predicted from 1981 to 2013. The overall trend of estimated TFPG has been found to be declining gradually and there is a positive and significant relationship between output growth and TFPG in M&O industry from 1981 to 2013. Next, the Ordinary Least Square model was applied to analyse the variables that have an effect on the TFPG in M&O industry. Among others, value-added per worker and R&D expenditure in private sector are found to have significant positive influence on TFPG, while accident frequency rate and employer’s CPF contribution rate are found to have significant negative influence on TFPG.