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Firm-Level TFP Growth in the Chinese Automobile Industry

Author

Listed:
  • Xiaoheng Zhang

    (College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China)

  • Xu Tian

    (College of Economics and Management, Nanjing Agricultural University, Nanjing 210095, China)

Abstract

China has been the world's largest automobile producer since 2009, but it still lags behind other countries in terms of productivity. Based on the National Bureau of Statistics of China (NBSC) firm-level data and the improved approach proposed by Ackerberg et al. (2015), this paper investigates the contribution of total factor productivity (TFP) growth to the Chinese automobile industry and evaluates the impact of firm entry and exit on TFP growth. The empirical results show that the TFP of the Chinese automobile industry grows at 10.7% per year. Joint venture and foreign-owned firms have a significantly higher TFP growth rate than others. Large-scale firms have a higher TFP growth rate than do small-scale firms, but the latter have caught up after 2004. Moreover, the entry of new firms and exit of old firms significantly improve the aggregate TFP growth rate.

Suggested Citation

  • Xiaoheng Zhang & Xu Tian, 2020. "Firm-Level TFP Growth in the Chinese Automobile Industry," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 15(1), pages 103-123, March.
    • Handle: RePEc:fec:journl:v:15:y:2020:i:1:p:103-123
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-011-020-0005-7
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    Cited by:

    1. Yonghong Ma & Huili Ni & Xiaomeng Yang & Lingkai Kong & Chunmei Liu, 2023. "Government subsidies and total factor productivity of enterprises: a life cycle perspective," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(1), pages 153-188, April.

    More about this item

    Keywords

    automobile industry; total factor productivity (TFP) growth rate; firm entry and exit; ACF model; ownership structure; China; National Bureau of Statistics of China (NBSC) database; firm size;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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