EXPLORING THE EFFECT OF TOTAL FACTOR PRODUCTIVITY GROWTH ON FUTURE OUTPUT GROWTH Evidence from a Panel of East Asian Countries

Total factor productivity (tfp) has gained increased importance as it has been helpful in accelerating the rate of economic growth in developed countries. the east asian countries (eacs) have also followed the developed countries. there has been a debate among growth economists whether the unprecedented growth of these countries has been factor-driven or productivitydriven. in this backdrop, the present study has tested the predictability of tfp for economic growth in four eacs (hong kong, korea, malaysia and thailand) using the fixed effects regression model and the pooled regression model over the period 1970-2004. the study concludes that productivity growth is a significant source of output growth as well as of investment growth. further, the countries under study converge to their own steady state paths.