The first-generation South Asian Development Model overemphasized capital formation per se and scarcely recognized the critical role of productivity and technological change in economic development. While some rethinking has taken place in recent years, South Asian countries still do not seem to have paid productivity the attention it deserves as a source of economic development. In this paper, an attempt has been made to assess what has been happening to productivity in Bangladesh manufacturing.

Using the panel data from a merge file of newly cleaned-up tapes of the Census of Manufacturing Industries (CMI), estimates of year-to-year changes in total factor productivity (TFP) in Bangladesh manufacturing industries over a period of about a dozen years have been made. The estimates are based on the growth-accounting method, as distinguished from the estimated production function method. They are done by size-class of firms at the four-digit-industry level. It is found that much less than increasing, TFP in the manufacturing industry has declined in Bangladesh. A brief look is also taken at factor intensities. The findings provide evidence suggesting correction in some of the impressions held in several quarters about the relative factor intensities and factor productivities between small and large enterprises of Bangladesh.