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Literature Review on Determinants of Total Factor Productivity (TFP) at the Firm-Level

DOI : https://doi.org/10.36344/ccijemms.2021.v03i04.002

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The assessment of factors affecting TFP growth at the firm-level has been mentioned by many researchers. This paper reviews the determinants of TFP at the micro level. The determinants of TFP examined in this paper are the following: technology, export activities, foreign direct investment, firm location, managerial ability, firm age, and other factors such as financial constraints, salary, capital structure, resource constraint. This is followed by a review of studies analysing multiple determinants of TFP because productivity has many affecting factors, and these factors often interact and create synergies. Omitting other important factors that affect productivity will result in misleading estimates of the production functions and productivity so several studies have addressed this issue by looking at multiple factors that affect productivity.

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