ABSTRACT
The categorization of the industrial growth rates by their different sources enables us to measure relative contributions of various sources of growth to the real output growth of industries. The analysis can be done either from the demand or the supply side. On the demand side the growth rates can be separated by the type of market demand, namely, domestic market, export market, or the demand arising from substituting domestic supply for imports. On the supply side, growth of real output can be classified according to either the accumulation of real factor inputs or the increases of total factor productivity (TFP). Many studies have found that TFP growth has been the primary source of manufacturing growth in industrial countries since the Second World War. In the long term it is crucial for industrializing countries to increase TFP growth in order to sustain high output growth. The unresolved issue is how different growth components, particularly TFP, are influenced by changing world economic conditions and domestic development policies.
