The objective of this study is to examine the sources of economic growth especially the total factor productivity growth in Thailand during 1977-1999, using the Growth Accounting Method. Three different methods are used to adjust the crude total factor productivity growth in order to separate the effects of business fluctuation, the quality change of labor inputs, and the sectoral labor mobility. The multiple regression analysis is used to investigate the sources of the total factor productivity growth as shown in the last section. The obtained results show that the percentage contribution of the total factor productivity growth to economic growth was only 20.48, while the input growth accounted for 79.52 percent. For sectoral analysis, the results were similar to the result of the overall economy. The relative contribution of capital input to output growth was the main source of the output growth in almost all sectors, except in the agricultural sector which the total factor productivity growth was the main source of the output growth. The results of the labor quality improvement and sectoral labor mobility adjusted for total factor productivity growth were lower than the crude total factor productivity growth, while the total factor productivity growth adjusted for the business fluctuation was higher than the crude one. The regression results show that the export growth rate, the imported capital growth rate, the growth rate of share of labor in non-agricultural sector, and the growth rate of share of labor with university education were the main factors determining the total factor productivity growth. Therefore, it is recommended that trade liberalization, investment promotion policy, and the human resource development policy played significant impacts on the overall productivity. However, these factors have to be developed at the same pace with the technological change for the sustainable development.
