Research Of The Total Factor Productivity Of The Global Primary Aluminium Industry: 2000-2006

The purpose of this paper is to evaluate the development of the total factor productivity (TFP) in the global primary aluminium industry using data envelopment analysis techniques and Malmquist-indices. The hypothesis posed is that there exist significant variations in the total factor productivity (TFP) of the primary aluminium industry across different regions and over time, measured by year-by-year changes in productivity. In stagnant regions, with cost disadvantages, mainly in the west, stronger TFP-improvments, especially in the form of enhanced technical change is expected. The evaluation is based on smelter level data covering the period 1993-2003. The result of the analysis indicates that there are variations in TFP change across regions. With the exception of smelters in Western Europe, there have been considerable TFP improvements in both North America and West Europe region, all high cost regions, however mostly from technical change. In some regions with strong capacity expansion, such as China and other developing countries, have experienced relatively weak overall improvements in TFP, especially in terms of efficiency change.