Economic Growth and Productivity Dynamics in East Asia
Summary
East Asia’s remarkable economic ascent since the mid-20th century has been driven by a virtuous interplay of rapid industrialisation, capital accumulation, labour reallocation and technological catch-up. Initial phases of export-oriented development were underpinned by large-scale investment in manufacturing, underpinned by rising human capital and steadily improving institutions. As economies matured, the focus shifted towards innovation, productivity enhancement and higher value-added activities. Total factor productivity (TFP) gains have been substantial in newly industrialised economies, reflecting deepening integration into global value chains and accelerated technology adoption. Structural transformation remains central, as surplus labour in agriculture moves into more productive manufacturing and services. Regional economic co-operation through trade agreements and shared infrastructure projects has reinforced this dynamic, while demographic transitions and urbanisation have reshaped domestic markets. More recently, growth in several economies has moderated as scope for catch-up narrows and productivity deceleration emerges, prompting renewed emphasis on digitalisation, green technologies and inclusive policy frameworks to sustain momentum.
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Economic Growth and Productivity Dynamics in East Asia publication trend
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Technical terms
Total factor productivity (TFP): The component of output growth not explained by measured inputs of labour and capital, often interpreted as a proxy for technological progress or efficiency improvements.
Growth accounting: A framework that decomposes aggregate economic growth into contributions from factor accumulation and productivity change.
Structural transformation: The reallocation of economic activity and labour from low-productivity sectors (typically agriculture) into higher-productivity manufacturing and services.
Stochastic production frontier: An econometric approach that estimates the maximum feasible output for given inputs, allowing for random shocks and inefficiency.
Malmquist productivity index: A measure of productivity change over time, decomposing shifts into efficiency change and technical (frontier) shift.
References
- Growth accounting, development accounting and cross-country growth regressions: A conceptual review essay. The Journal for Transdisciplinary Research in Southern Africa (2022).
- Examining the productivity of the ASEAN economies in the presence of transient and persistent efficiency. Cogent Economics & Finance (2020).
- Understanding political influences on Southeast Asia's development experience. Fulbright Review of Economics and Policy (2021).
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