What Is Total Factor Productivity?

Total factor productivity refers to the comprehensive productivity of production units (mainly enterprises) as each factor in the system to distinguish it from factor productivity (such as technical productivity). In fact, enterprise productivity is a comprehensive function of enterprise technology upgrade, management mode improvement, product quality improvement, and enterprise structure upgrade. Any actual productivity is actually total factor productivity. Total factor productivity can also be called system productivity. Total factor productivity is productivity. The improvement of total factor productivity is the industrial upgrading and the development of productivity. ^[1-5]

TFP

Total factor productivity refers to the comprehensive productivity of production units (mainly enterprises) as each factor in the system to distinguish it from factor productivity (such as technical productivity). In fact, enterprise productivity is a comprehensive function of enterprise technology upgrade, management mode improvement, product quality improvement, and enterprise structure upgrade. Any actual productivity is actually total factor productivity. Total factor productivity can also be called system productivity. Total factor productivity is productivity. The improvement of total factor productivity is the industrial upgrading and the development of productivity. ^[1-5]

Total factor productivity refers to the comprehensive productivity of production units (mainly enterprises) as each factor in the system to distinguish it from factor productivity (such as technical productivity). In fact, enterprise productivity is a comprehensive function of enterprise technology upgrade, management mode improvement, product quality improvement, and enterprise structure upgrade. Any actual productivity is actually total factor productivity. Total factor productivity can also be called system productivity. Total factor productivity is productivity. The improvement of total factor productivity is the industrial upgrading and the development of productivity. ^[1-5]

The total factor productivity (TFP) cannot be calculated directly from the total output, so it can only be taken indirectly:

GY = GA + aGL + bGK

Of which: GY-economic growth rate

GA Total Factor Productivity Growth Rate (also known as Solow Residual Technology Progress Rate)

GLlabor increase rate

GK-capital

If labor, capital (including capital and property created by labor such as factory buildings, machinery and equipment, and inventory) and land (including all natural resources) are invested in production, a total of US $ 1 million is produced, and the total output produced is 1.5 million US dollars. Then, the 1.5 million US dollars output is composed of two contributions, of which 1 million US dollars is caused by the input of 1 million US dollars of production factors, and the remaining 500,000 US dollars is the contribution of total factor productivity (TFP) . If the output of this year is increased by 15% compared with the previous year, and the growth of factor input is 10%, the remaining 5% is the growth of total factor productivity.