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Economic Reforms and the Evolution of China's Total Factor Productivity

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  • Chadwick Curtis

    (University of Richmond)

Abstract

This paper investigates the impact of economic reforms on China's growth in Total Factor Productivity (TFP). I build a model with two sectors in production -- the private and the state sectors -- that features capital market imperfections on the private sector.Following the removal of prohibitive barriers to private entrepreneurship (reforms), TFP gains follow the expansion of the private sector and the closure of the least productive state enterprises. Although the distribution of production technologies in both sectors are identical, the model generates persistently higher TFP in the private sector via a selection mechanism arising from financial frictions. (Copyright: Elsevier)

Suggested Citation

  • Chadwick Curtis, 2016. "Economic Reforms and the Evolution of China's Total Factor Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 21, pages 225-245, July.
    • Handle: RePEc:red:issued:14-80
    DOI: 10.1016/j.red.2015.02.005
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    Cited by:

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    3. Huang, Junbing & Cai, Xiaochen & Huang, Shuo & Tian, Sen & Lei, Hongyan, 2019. "Technological factors and total factor productivity in China: Evidence based on a panel threshold model," China Economic Review, Elsevier, vol. 54(C), pages 271-285.
    4. Ramalho,Rita & Saltane,Valentina, 2019. "Does Media Stimulate Reform Efforts ?," Policy Research Working Paper Series 8984, The World Bank.
    5. Steven Lugauer & Jinlan Ni & Zhichao Yin, 2014. "Micro-Data Evidence on Family Size and Chinese Saving Rates," Working Papers 023, University of Notre Dame, Department of Economics, revised Jun 2014.
    6. Walheer, Barnabé & He, Ming, 2020. "Technical efficiency and technology gap of the manufacturing industry in China: Does firm ownership matter?," World Development, Elsevier, vol. 127(C).
    7. Shuonan Zhang, 2024. "State‐owned enterprises and entrusted lending: Economic growth and business cycles in China," Economic Inquiry, Western Economic Association International, vol. 62(1), pages 197-222, January.
    8. Liu, Chong & Wang, Wei & Wu, Qunfeng, 2019. "Transportation infrastructure, competition and productivity: Theory and evidence from China," Economics Letters, Elsevier, vol. 174(C), pages 74-77.
    9. Gu, Shijun & Jia, Chengcheng, 2022. "Firm dynamics and SOE transformation during China’s Economic Reform," Journal of International Money and Finance, Elsevier, vol. 127(C).
    10. Bollinger, Christopher & Ding, Xiaozhou & Lugauer, Steven, 2022. "The expansion of higher education and household saving in China," China Economic Review, Elsevier, vol. 71(C).
    11. Tao Gu, 2020. "The behavior of private entrepreneurs in an imperfect financial market," Economics Bulletin, AccessEcon, vol. 40(1), pages 349-358.
    12. Toni M. Whited & Jake Zhao, 2021. "The Misallocation of Finance," Journal of Finance, American Finance Association, vol. 76(5), pages 2359-2407, October.
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    More about this item

    Keywords

    China; Total factor productivity; Economic reforms; Financial frictions;
    All these keywords.

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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