Jornal Europeu de Biologia Experimental Acesso livre

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Investigating the Total Factor Productivity in Agricultural Sector Using Growth Accounting in Iran

Khani Hamid, Yazdani Qanbar Ali

This research seeks to determine the effect of total factor productivity in agricultural sector during 1959 to 2007. The purpose of this study is to determine the determinants of total factor productivity in Iran. The theoretical framework was designed based on this assumption that production growth is divided into two factors, workforce production and physical capital production. The data were collected from 1959 to 2007 and were analyzed using growth accounting. The result of the analyses shows that there is significant relationship between determinants of total factor productivity in agricultural sector. In relation to that, it is concluded that explanatory power is high for the equation that shows that one percent change in human capital skilled rate lead to 30% in total factor productivity and one percent change in physical capital rate lead to 55% in total factor productivity in agricultural sector. Therefore, a physical capital is regarded as an important factor in total factor productivity in agricultural sector.