Factor Shares, Productivity, and Sustainability of Growth in the Malaysian Agricultural Sector

This study examines the structure of the Malaysian agricultural production function over a thirty-seven-year period (1960-96). In particular, this study analyses how the shares of factors and total factor productivity to agricultural growth change over time, using the Cooley-Prescott (C P) time-varying parameter (TVP) model. The relative magnitudes of the permanent and temporary portions of the time-varying parameter vectors, and changes in factor shares and input elasticities for Malaysian agriculture, are also examined over time. Policy implications on agricultural sustainability are offered.