Expanding the asset coverage to include intangible capital not already in the SNA also affects the measurement of inputs and the decomposition of labour
productivity growth into its three main components: capital deepening effect, labour composition effect and MFP growth.
Figure 2 shows the decomposition of labour
input for Germany, Italy and .Japan.
The asymmetry between productivity increases and employment reallocation among sectors and subsectors is confirmed when we look at the decomposition of labour productivity growth (Table 7; for details, see Table A1, Statistical Appendix).
Table 7: Decomposition of labour productivity growth in China- percentage contribution by 7 subsectors and industry 1980-92 1992-02 1980-02 7 SUBSECTORS PRODUCTIVITY EFFECT 87.3 107.8 94 REALLOCATION EFFECT 12.7 -7.8 6 TOTAL EFFECT 100 100 100 INDUSTRY PRODUCTIVITY EFFECT 87.3 98.6 98.3 REALLOCATION EFFECT 12.7 1.4 1.7 TOTAL EFFECT 100.0 100.0 100.0 Calculations are based on 1980 constant prices.
Following Olley and Pakes (1996), we also conduct a cross-sectional decomposition of labour
Figure VII.1 presents a decomposition of labour
productivity growth rates in manufacturing into a within-firm component and the different components due to the reallocation of resources across firms (see Box VII.1 above).
(6) To address this problem, Tang and Wang modified the traditional decomposition of labour
productivity so that it depends on nominal additivity rather than real additivity.
Maliranta (2009) applies formula (2) in two ways; first, he does so by performing a decomposition of labour
productivity growth for all manufacturing plants together.
Of this lagging performance around 90 per cent is attributed to the poor performance of multi-factor productivity in the business sector, the residual in the decomposition of labour
productivity growth after increasing capital intensity and improvements in the quality of the labour force have been accounted for.