Factor Accumulation, Total Factor Productivity, Random Shocks and Output Growth in Cameroon
The main focus of this paper is to examine the proper channels through which the Cameroon economy can achieve a high output (GDP) growth rate and sustain it over time in order to accelerate her pace of economic recovery. Specifically, the paper attempts to understand the role of the various determinants of GDP and to investigate the role of random shocks (RNDSH) in GDP growth in the Cameroon economy from 1970 to 2015. A maximum likelihood technique (MLT) is used to estimate a trans log stochastic frontier production function in a one stage estimation procedure. The results reveal that GDP growth in the Cameroon economy is promoted by labour and capital, which jointly contribute 68% (47% for labour and roughly 22% for capital) against -22% for total factor productivity (TFP). The results also show that RNDSH impedes the GDP growth of the country at an annual average rate of 9.1% throughout the study period. These results imply that the Cameroon economy needs to focus on labour intensive techniques of production so as to propel GDP growth. This study recommends that more efforts should be invested in human capital development, reduction of inefficiency in production processes, and design of proper mechanisms to minimise the effects of Random shocks in the economy.