Measuring and Forecasting of Total Factor Productivity in Pharmaceutical Manufacturing Companies in Iran: an Approach Based Production Method

Nowadays, improving productivity as the most effective way to achieve growth is raised. Key to improving productivity lies in the measurement and analysis of productivity. Also, Analysis and productivity measurement is practical when productivity changes over time with the productivity indices is showed.
This study is a correlation- regression analysis. At first, production Elasticity coefficients of capital and labor was calculated through estimating a Cobb-Douglas production function using data of 10 pharmaceutical production companies active in the Tehran Stock Exchange during years 1389 to 1393 and panel data with fixed effects . Then, TFP index for these companies is estimated by taking into account the estimated coefficients in the Kendrick index. The index for the years 1394 to 1398 by applying the scenario of continuity of labor, capital and added value for any company is predicted.
TFP during the years 1389 to 1393 show that the two companies Alborz Darou and Luqman is located in the better status and Tehran Chemical Company is located in the lowest position. Forecasting for TFP during the next five years also shows the two Luqman and Alborz Darou and Rayhan are in good condition, but Tehran Chemical Company continues to be exposed to unsuitable conditions.
The findings suggest that Tehran Chemical Company to improve its total factor productivity should seriously pursue productivity cycle management.