Productivity change in the korean government-invested enterprises: A malmquist approach

This paper analyzes productivity change in the ten Korean government-invested enterprises (GIEs) by applying Malmquist productivity indexes. The authors use financial indexes of the enterprises over the period 1993–2003 to measure productivity change. The Malmquist indexes of total factor productivity (TFP) growth are used for measuring and comparing productivity. The indexes are decomposed into two components, efficiency change and technical change (innovation). Results show that productivity of the Korean GIEs increased until 1998. The rest of the period did not enjoy significant increase. Productivity even decreased in the periods of 1998–1999, 2000–2001, and 2002–2003. This study finds that the productivity decrease is due to the weak performance of technical change. The decrease in the technical change suggests the lack of the ability to maximize output from the observed input mix.