Sources of Growth in the Various Turkish State Manufacturing Enterprises.

Abstract

This study is designed to measure sources of growth in the Turkish State Tea, Sugar, Tobacco, Cotton Yarn, Sawmill, Paper and Cement industries--industries that consume natural resources. The study begins with the investigation of substitution and complementary possibilities in these seven industries, employing a three-input (labour, natural resources and capital) translog production function. Thereafter, sources of growth are examined in terms of the contribution of changes in labour, natural resources, and embodied and disembodied technological progress in short-periods, 3-7 years, during which the capital stock remained relatively stable. The total effect of each factor's contribution to the growth of output is measured in terms of a physical value (tons or m('3)), and a percentage of total, after which estimated and actual growths are compared. Up to a 10 percent difference is accepted as reasonable, adjustments are made, and comparisons between factor contribution carried out. The period under consideration is from 1960 to 1979 and the price index taken in 1968 equals 100. Generally speaking, input prices remained stable or dropped over the whole period whereas output prices varied. Particular reasons are presented. Output grew an average of under 5 percent except for paper (8 percent), cement (9 percent) and tea (14.5 percent). The ratio of change in natural resource to output was rather stable, as was the labour/output ratio. The number of people employed in the industries grew moderately except in the tea and tobacco industries. Wages increased in all industries, as did capital stocks. Marginal productivity of labour, and marginal physical productivity of natural resources went up in most cases. Each factor's contribution to the growth of output has followed a consistent path. While one half or more of the growth was credited to embodied technological progress, disembodied technological progress revealed potential opportunities. The study's major findings follow: An econometric relationship was established between the three inputs and outputs; predictions were then made about future price movements of inputs and output, sources of growth in the short-periods that may be employed by planners; and finally, about State Manufacturing Enterprises' important role in the country's future.