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International Regional Science Review, Vol. 29, No. 2, 115-134 (2006)
DOI: 10.1177/0160017606286273

The Measurement of Capital and the Measurement of Productivity Growth and Efficiency in State Manufacturing

Bruce R. Domazlicky

Department of Economics and Finance, Southeast Missouri State University, Cape Girardeau bdomazlicky{at}semo.edu

William L. Weber

Department of Economics and Finance, Southeast Missouri State University, Cape Girardeau c645sse{at}semo.edu

No single way of measuring the capital stock has been agreed upon by regional researchers. The authors examine five methods that have been proposed for measuring the capital stock in state manufacturing. They discuss the properties of each of the five capital stock allocation methods and then estimate state efficiency levels and productivity growth rates during the period 1982 to 1996 for each of the five methods. Their findings indicate that efficiency levels are significantly different for states depending on which method of capital measurement is used. However, productivity growth rates do not appear to be as sensitive to capital measurement, averaging 2.5 to 3 percent annual rates for the period.

Key Words: productivity growth • capital measurement • state manufacturing


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