2008 Volume 54 Issue 3 Pages 1-6
This study applies the nonparametric Tornqvist-Theil index approach to analyze trends of single and total factor productivity growth in the sawmilling industry of Japan between 1970 and 2004. Over the long-term, labor has been the input that has experienced the highest growth in productivity: 1.88% per year. This result likely reflects the significant increase in capital stock. Total factor productivity (TFP) grew at an average annual compound rate of 0.17% as a result of growth in output and aggregated inputs by -2.61% and -2.78%, respectively. TFP went downward with the decrease of output, and upward with the adjustment of inputs. The growth of TFP in the Japanese sawmill industry is lower than that of competing countries in North America. This shows that the Japanese sawmill industry has been losing its competitiveness and indicates a need for restructuring of the industry to sustain its position.
