The Growth of Total Factors Productivity in Iran’s Important Sectors During the First, the Second and the Third Development Plans

Productivity has a crucial role in the growth of production and increases competitions among countries. In this paper, the trend of the growth of total factors productivity in Iran’s three major sectors (industry and mining, agriculture and transport) during 1989-2004 (the first, the second and the third development plans) was studied. For this purpose, Malmquist Productivity Index was used. The results showed that the growth of total factors productivity in the agricultural sector during that period was positive and due to changes in technology and the growth of total factors productivity in the transportation sector was negative and due to changes in technology. While in the industry and mining sector both factors i.e. changes in technical efficiency and changes in technology, improved the total factors productivity and the growth of productivity in this sector was more than those in other two. Also, the results showed that reaching aims in the fourth development plan in the industry and mining sector is accessible but in the agricultural and transportation sectors it needs revising past policies and adopting new ones.

JEL Classification: N7, D29, D24