Iran's Food Industry Value-Added Growth Accounting: The Endogenous Growth Theory Approach

The purpose of this article is value-added and total factor productivity (TFP) growth accounting of 17 food and beverage two-digit ISIC industries by the endogenous growth theory approach in the period of 2003-2018. The results of research showed that in the production process, labor force and capital stock are complementary and the return to the scale trend is upward, which is compatible with the endogenous growth theory. The analysis of value-added growth indicated that classical production inputs (capital stock and labor force) play a dominant role in the growth of food and beverage industries. However, a considerable portion of their contribution in the value-added growth is due to the mixed with technology. The findings showed that technology has affected the productivity of labor force more than the productivity of capital stock and on this basis, the share of labor force-embedded technology in value-added growth growth is high and the share of capital- embedded technology is low in food and beverage value-added growth . In addition, the traditional growth accounting method in estimating the share of total factor productivity is associated with an underestimation error, and in the new growth accounting theory, the contribution of free technology in growth is significant.