The Impact of Human Capital on Total Factor Productivity in Iran's Medium and Large Industries

Productivity improvement as one of the important strategies of ensuring economic growth and increasing competitiveness of industries is considered by all countries. So that industrial and developing countries have obtained a considerable part of their production growth in this way. In this study, the effect of human capital on total factor productivity of Iranian medium and large industries is investigated over the period of 1995-2007. First Malmquist TFP index, management efficiency changes, scale efficiency changes and technological changes were measured for the industry using DEAP software. Then Malmquist index changes in relation to management efficiency changes, scale efficiency changes and technological changes have been analyzed using dynamic panel methods (method AB). Research findings suggest that changes in productivity of medium and large industries have been most affected by the performance improvement, and technological and management changes.