Efficiency and Productivity: Malmquist and More

Abstract

This chapter provides a link between the efficiency issues raised in Chapters 1-3 of this volume and the traditional measures of productivity and productivity growth. One of the key insights this link provides is the identification of the contributions of innovation (technical change or shifts in the frontier of technology) and diffusion and learning (catching up or efficiency change) to productivity growth. Topics discussed include duality and efficiency theory, productivity, decomposition of productivity, aggregation of indexes and indicators of efficiency and productivity, empirical estimation of the distance function-based productivity measures, and advantages and disadvantages of the various indexes and indicators.