Evaluating Productivity Changes of Entire Production Factors for Large Industries in the Provinces of Iran, Using Malmquist Productivity Index

The aim of this paper is to investigate and measure the productivity changes of entire production factors in industry sector (as a pioneer in development) in various provinces as well as to evaluate the role and contribution of its components.Different indexes have been represented to measure the productivity of enterprises and firms which evaluate productivity and performance from specific point of view. One of the newest indexes which measures organization productivity and performance from both financial and non-financial dimensions is Malmquist productivity index. This index, which is based on numerical indexes, is a proper criterion for those enterprises which are confronting with monopolistic and semi-monopolistic conditions in input and output markets and their in input and output prices are not real. Within the framework of this index, the changes in productivity of entire production factors are analyzed and measured in two sections; efficiency changes and technology changes. Required amounts of Malmquist index were computed using data envelopment analysis (DEA) technique and then, productivity changes of entire production factors for large industries of different provinces were determined in separation of efficiency and technology changes. Results show that during 1992-2009, the productivity of entire production factors for large industries in provinces has been raised relatively. According to results, the average rate for productivity changes of entire production factors for mentioned industries in mentioned period was 5 percent; while the average changes of negative efficiency was0.8 percent and the average of technology changes was 5.8 percent. In other words, the origin of increase in productivity level of entire production factors was due to technology changes. While it had a reinforcing effect on productivity, it neutralized the negative effect of efficiency changes.