520. The Australian multi-factor productivity growth illusion

John Foster,  School of Economics Discussion Paper No. 520 May 2014, School of Economics, The University of Queensland.

Full text available as:
PDF - Requires Adobe Acrobat Reader or other PDF viewer.

Abstract

Multi-factor productivity growth is widely discussed in the media and among policymakers in Australia. Over the past decade it has been predominantly negative often leading to the view that there is a ‘productivity crisis.’ It is shown that such a measure is wholly misleading. Preliminary econometric investigation suggests that it is economies of scale and scope that are the primary drivers of productivity growth in Australia. However, much more research needs to be undertaken, with the inter-related processes of innovation and entrepreneurship at its core, before any new policies to promote productivity growth are designed and implemented.