IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i18p4892-d264866.html
   My bibliography  Save this article

Exports, Misallocation, and Total Factor Productivity of Furniture Enterprises

Author

Listed:
  • Chang Xu

    (School of Economics and Management, Beijing Forestry University, Beijing 100083, China)

  • Jianbing Guo

    (School of Agricultural Economics and Rural Development, Renmin University of China, Beijing 100872, China)

  • Baodong Cheng

    (School of Economics and Management, Beijing Forestry University, Beijing 100083, China)

  • Yu Liu

    (Institutes of Science and Development, Chinese Academy of Sciences, Beijing 100190, China
    School of Public Policy and Management, University of Chinese Academy of Sciences, Beijing 100049, China)

Abstract

With the increase in labor costs in China and the tremendous changes in the international trade environment, upgrading the total factor productivity of Chinese furniture export enterprises faces a great challenge. Lots of studies have explored the interaction of exports or misallocation on the total factor productivity (TFP) of furniture enterprises, however, there is little knowledge on the impact and interaction of both exports and misallocation on the TFP. Based on panel data of Chinese furniture enterprises, this paper measures the TFP and the distortion of labor and capital resources in Chinese furniture enterprises. A two-way fixed-effects model is used to analyze the impact of exports and misallocation on the TFP of Chinese furniture enterprises. The paper reveals several important findings. First, the TFP of Chinese furniture export enterprises is lower than that of non-export enterprises, this phenomenon is called the “export–productivity paradox”. Chinese furniture export enterprises are processing trade-oriented and labor-intensive enterprises at the low end of the value chain, exports have a negative effect on improving the TFP of furniture enterprises in the short term. Second, the distortion of labor and capital resources in Chinese furniture enterprises promotes improvements to the TFP of furniture enterprises rather than reducing the TFP of furniture enterprises. Last but not the least, we find that misallocation has a positive moderating effect on exports and can weaken the negative impact of exports on TFP by the “forced mechanism”, which is that the higher the distortion of the misallocation, the higher the cost of acquiring capital and labor, and enterprises are forced to enhance their productivity when facing market competition, thus promoting improvements to the TFP of furniture enterprises.

Suggested Citation

  • Chang Xu & Jianbing Guo & Baodong Cheng & Yu Liu, 2019. "Exports, Misallocation, and Total Factor Productivity of Furniture Enterprises," Sustainability, MDPI, vol. 11(18), pages 1-14, September.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:18:p:4892-:d:264866
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/18/4892/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/18/4892/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bernard, Andrew B. & Bradford Jensen, J., 1999. "Exceptional exporter performance: cause, effect, or both?," Journal of International Economics, Elsevier, vol. 47(1), pages 1-25, February.
    2. Jan De Loecker, 2011. "Product Differentiation, Multiproduct Firms, and Estimating the Impact of Trade Liberalization on Productivity," Econometrica, Econometric Society, vol. 79(5), pages 1407-1451, September.
    3. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    4. Sai Ding & Alessandra Guariglia & Richard Harris, 2016. "The determinants of productivity in Chinese large and medium-sized industrial firms, 1998–2007," Journal of Productivity Analysis, Springer, vol. 45(2), pages 131-155, April.
    5. Joachim Wagner, 2016. "Exports and Productivity: A Survey of the Evidence from Firm Level Data," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 1, pages 3-41, World Scientific Publishing Co. Pte. Ltd..
    6. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    7. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    8. Laiqun Jin & Changwei Mo & Bochao Zhang & Bing Yu, 2018. "What Is the Focus of Structural Reform in China?—Comparison of the Factor Misallocation Degree within the Manufacturing Industry with a Unified Model," Sustainability, MDPI, vol. 10(11), pages 1-19, November.
    9. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
    10. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    11. Zheng Song & Kjetil Storesletten & Fabrizio Zilibotti, 2011. "Growing Like China," American Economic Review, American Economic Association, vol. 101(1), pages 196-233, February.
    12. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    13. Gary Jefferson & Thomas Rawski & Yifan Zhang, 2008. "Productivity growth and convergence across China's industrial economy," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(2), pages 121-140.
    14. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages 134-161, February.
    15. Konstantins Benkovskis, 2018. "Misallocation, productivity and fragmentation of production: the case of Latvia," Journal of Productivity Analysis, Springer, vol. 49(2), pages 187-206, June.
    16. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    17. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
    18. Cai Fang, 2004. "The Consistency of China's Statistics on Employment : Stylized Facts and Implications for Public Policies," Chinese Economy, Taylor & Francis Journals, vol. 37(5), pages 74-89, September.
    19. Alwyn Young, 2003. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1220-1261, December.
    20. Hailin Liao & Xiaohui Liu & Chengang Wang, 2012. "Knowledge spillovers, absorptive capacity and total factor productivity in China’s manufacturing firms," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(4), pages 533-547, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Quang-Thanh Ngo & Quang-Van Tran & Tien-Dung Nguyen & Trung-Thanh Nguyen, 2020. "How Heterogeneous Are the Determinants of Total Factor Productivity in Manufacturing Sectors? Panel-Data Evidence from Vietnam," Economies, MDPI, vol. 8(3), pages 1-25, July.
    2. Chenggang Wang & Dongxue Yang & Tiansen Liu, 2024. "The Impact of Factor Price Distortions on Export Technology Complexity: Evidence from China," Sustainability, MDPI, vol. 16(16), pages 1-27, August.
    3. He, Weijun & Li, Wanyu & Wang, Chun & Wang, Siyuan & Yang, Yuantao, 2024. "Does energy resource misallocation affect energy utilization efficiency? Evidence from Chinese provincial panel data," Energy, Elsevier, vol. 288(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sai Ding & Alessandra Guariglia & Richard Harris, 2016. "The determinants of productivity in Chinese large and medium-sized industrial firms, 1998–2007," Journal of Productivity Analysis, Springer, vol. 45(2), pages 131-155, April.
    2. Alvaro Garcia-Marin & Nico Voigtländer, 2019. "Exporting and Plant-Level Efficiency Gains: It's in the Measure," Journal of Political Economy, University of Chicago Press, vol. 127(4), pages 1777-1825.
    3. Gabriella Berloffa & Eleonora Matteazzi & Alina Şandor & Paola Villa, 2019. "The quality of employment in the early labour market experience of young Europeans," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(6), pages 1549-1575.
    4. Hansen, Thorsten, 2010. "Exports and Productivity: An Empirical Analysis of German and Austrian Firm-Level Performance," Discussion Papers in Economics 11466, University of Munich, Department of Economics.
    5. Marco Bee & Maria Michela Dickson & Flavio Santi, 2018. "Likelihood-based risk estimation for variance-gamma models," Statistical Methods & Applications, Springer;Società Italiana di Statistica, vol. 27(1), pages 69-89, March.
    6. Rosario Crinò & Paolo Epifani, 2009. "Productivity, Quality and Export Behavior (Revised version of: Firm-Export Intensity and Productivity, September 2011)," Development Working Papers 271, Centro Studi Luca d'Agliano, University of Milano.
    7. DU, Julan & LU, Yi & TAO, Zhigang & YU, Linhui, 2012. "Do domestic and foreign exporters differ in learning by exporting? Evidence from China," China Economic Review, Elsevier, vol. 23(2), pages 296-315.
    8. Bin, Peng & Chen, Xiaolan & Fracasso, Andrea & Tomasi, Chiara, 2018. "Resource allocation and productivity across provinces in China," International Review of Economics & Finance, Elsevier, vol. 57(C), pages 103-113.
    9. Alessandro Borin & Michele Mancini, 2016. "Foreign direct investment and firm performance: an empirical analysis of Italian firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(4), pages 705-732, November.
    10. Miguel Manjón & Juan Máñez & María Rochina-Barrachina & Juan Sanchis-Llopis, 2013. "Reconsidering learning by exporting," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(1), pages 5-22, March.
    11. Gabriella Berloffa & Eleonora Matteazzi & Paola Villa, 2017. "The intergenerational transmission of worklessness in Europe.The role of fathers and mothers," DEM Working Papers 2017/04, Department of Economics and Management.
    12. Francesco Serti & Chiara Tomasi, 2008. "Self-Selection and Post-Entry Effects of Exports: Evidence from Italian Manufacturing Firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 144(4), pages 660-694, December.
    13. Bena Jan & Ondko Peter & Vourvachaki Evangelia, 2011. "Productivity Gains from Services Liberalization in Europe," EERC Working Paper Series 11/15e, EERC Research Network, Russia and CIS.
    14. Ulf Lewrick & Lukas Mohler & Rolf Weder, 2014. "When firms and industries matter: understanding the sources of productivity growth," BIS Working Papers 469, Bank for International Settlements.
    15. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    16. Torres Mazzi, Caio & Foster-McGregor, Neil, 2021. "Imported intermediates, technological capabilities and exports: Evidence from Brazilian firm-level data," Research Policy, Elsevier, vol. 50(1).
    17. Jan De Loecker & Pinelopi K. Goldberg & Amit K. Khandelwal & Nina Pavcnik, 2016. "Prices, Markups, and Trade Reform," Econometrica, Econometric Society, vol. 84, pages 445-510, March.
    18. Richter, Philipp M. & Schiersch, Alexander, 2017. "CO2 emission intensity and exporting: Evidence from firm-level data," European Economic Review, Elsevier, vol. 98(C), pages 373-391.
    19. Jun Du & Yama Temouri, 2015. "High-growth firms and productivity: evidence from the United Kingdom," Small Business Economics, Springer, vol. 44(1), pages 123-143, January.
    20. Jan De Loecker, 2010. "A Note on Detecting Learning by Exporting," NBER Working Papers 16548, National Bureau of Economic Research, Inc.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:18:p:4892-:d:264866. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.