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Seoul Journal of Economics - Vol. 21 , No. 1
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Seoul Journal of Economics - Vol. 21, No. 1, pp. 5-38
Abbreviation: SJE
ISSN: 1225-0279 (Print)
Print publication date 29 Feb 2008
Received 13 Oct 2007 Revised 26 Feb 2008

An International Comparison of the TFP Levels of Japanese, South Korean, and Chinese Listed Firms
Kyoji Fukao ; Tomohiko Inui ; Shigesaburo Kabe ; Deqiang Liu
Professor, The Institute of Economic Research, Hitotsubashi University (k.fukao@srv.cc.hit-u.ac.jp)
Professor, College of Economics, Nihon University (inui@eco.nihon-u.ac.jp)
Senior Economist, Japan Center for Economic Research (JCER) (kabe@jcer.or.jp)
Professor, Graduate School of Economics, Kyoto University (deqiang98@yahoo.co.jp)

JEL Classification: D24

Abstract

To compare the TFP level of firms in Japan, China, and South Korea, we first estimated the TFP of firms in each country using the method of Good, Nadiri, and Sickles (1997). Then we estimated the relative TFP by industry in the benchmark year using Japanese industries as benchmarks and combined the estimated TFP of firms. When estimating relative TFP by industry for South Korea and China, we applied the industry-level price estimates of the three countries from the ICPA project and converted industry outputs and inputs into the same currency unit (Japanese Yen). The estimation results obtained indicate that the productivity of Japanese firms is still higher than that of their Chinese and South Korean counterparts but that the productivity of South Korean firms is rapidly increasing, with the emergence of some firms that are now overtaking their Japanese rivals in terms of productivity, particularly in the electric machinery sector.

Keywords: Total factor productivity, International comparison, Competitiveness
Acknowledgments

The authors would like to thank the participants of the 15th Seoul Journal of Economics International Symposium on October 23, 2007 at Seoul National University for their helpful comments on an earlier version of the paper. We would also like to thank two referees for their valuable suggestions.

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