Evaluating the Total Factor Productivity Growth in Manufacturing Industries of Iran (Data Envelopment Analysis Approach)


  • Vahideh Ahmadi Accounting Department, Islamic Azad University
  • Ahmad Ahmadi Accounting Department, Islamic Azad University


This paper examines the total factor productivity changes for 23 main manufacturing industries (2-digit ISIC group) and country's provinces using data envelopment analysis during 2005 to 2007. The results show 2.3% increase in the productivity of the whole sector (average over the studied period), while the productivity of the country's provinces decreases by 7.3%, in the same period. We find Food and Beverage products and Khuzestan province having the highest productivity growth. Non-optimal allocation of resources and using of old equipments are the most important drawbacks of productivity growth for 23 main ISIC groups and provinces. Finally estimation of the regression models by panel data method reveals the privatization and increasing of labor’s available capital having a significant effect on productivity growth.


Charnes, A., Cooper, W.W., Rhoudes, E. (1978). Measuring the Efficiency of Decision Making Units. European Journal of Operational Research 2 (4): p. 429-444;

Details Census Results from industrial activities, Statistical Center of Iran, 2005-2007;

Fare, R., Grosskopf, S., Margaritis, D. (2001). Productivity Trends in Australian and Newzealand Manufacturing. Australian Economic Review 34(2): p. 125-134;

Fare, R., Grosskopf, S., Lee, W.F. (1995). Productivity in Taiwanese Manufacturing Industries. Applied Economics 27 (3): p. 259-265;

Fare, R., Grosskopf, S., Lindgren, B. (1992). Productivity Changes in Swedish Pharmacise: A Non Prametric Malmquist Approach. Journal of Productivity Analysis 3: p. 85-102;

Jajri, I. (2007). Determinants of Total Factor Productivity Growth in Malasia. Journal of Economic Cooperation 28: p. 41-58;

Raheman, A., Afza, T., Bolda, M.A. (2008). Estimating Total Factor Productivity and its Components: Evidence from Major Manufacturing Industries of Pakistan. The Pakistan Development Review 47 (4): p. 677-694;

Senturk, S.S. (2010). Total Factor Productivity Growth in Turkish Manufacturing Industries: A Malmquist Productivity Index Approach, Master Thesis, University of Stokholm;

Shen, Y. et al. (2010). A DEA- Based Malmquist Productivity Index Approach Assessing Road Safety Performance. Computational Intelligence Foundations and Applications 4: p. 923-928;

Vahid, S., Sowlati, T. (2008). Productivity Changes of the Wood Product Manufacturing Sector in the U.S. Applied Mathematical Science 2 (17): p. 799-816.