IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/15048.html
   My bibliography  Save this paper

Accounting for the Sources of Growth in the Chinese Economy

Author

Listed:
  • Harry WU

Abstract

Using a newly constructed China Industrial Productivity (CIP) data set, this study adopts the Jorgensonian aggregate production possibility frontier (APPF) framework incorporating Domar weights to account for the industry origin of China's aggregate growth for the period 1980-2010. We show that 7.14 percentage points of China's gross domestic product (GDP) growth of 9.16% per annum can be attributed to the increase in labor productivity and 2.02 percentage points to the number of hours worked. The labor productivity growth can be further decomposed into 5.55 percentage points of capital deepening, 0.35 percentage points of labor quality improvement, and 1.24 percentage points of total factor productivity (TFP) growth. Across industries, those less prone to government intervention, such as agriculture and "semi-finished & finished" manufacturing industries, appear to be more productive than those subject to more government intervention, typically the "energy" industry group. The Domar aggregation scheme also reveals that only two-thirds of the 1.24% annual TFP growth, or 0.84 percentage points, are directly from industries and the remaining 0.40 percentage points are from a net factor reallocation effect in which labor played a positive role of 0.56 percentage points whereas capital played a negative role of -0.16 percentage points.

Suggested Citation

  • Harry WU, 2015. "Accounting for the Sources of Growth in the Chinese Economy," Discussion papers 15048, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:15048
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/15e048.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Zvi Griliches, 1960. "Measuring Inputs in Agriculture: A Critical Survey," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 42(5), pages 1411-1427.
    2. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
    3. Ark,Bart van & Crafts,Nicholas (ed.), 2007. "Quantitative Aspects of Post-War European Economic Growth," Cambridge Books, Cambridge University Press, number 9780521032933, January.
    4. Barry Bosworth & Susan M. Collins, 2008. "Accounting for Growth: Comparing China and India," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 45-66, Winter.
    5. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Productivity, Volume 3: Information Technology and the American Growth Resurgence," MIT Press Books, The MIT Press, edition 1, volume 3, number 0262101114, April.
    6. D. W. Jorgenson & Z. Griliches, 1967. "The Explanation of Productivity Change," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 34(3), pages 249-283.
    7. Zvi Griliches, 1992. "Output Measurement in the Service Sectors," NBER Books, National Bureau of Economic Research, Inc, number gril92-1.
    8. Andreas (Andy) Jobst & Harry X. Wu, 2008. "Measuring China’s Economic Performance," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 9(2), pages 13-44, April.
    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. Cao, Jing & Ho, Mun S. & Hu, Wenhao & Jorgenson, Dale, 2020. "Effective labor supply and growth outlook in China," China Economic Review, Elsevier, vol. 61(C).
    2. Guanghua Wan & Peter J. Morgan & Kyoji Fukao & Tangjun Yuan, 2016. "China's Growth Slowdown: Lessons from Japan's Experience and the Expected Impact on Japan, the USA and Germany," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(5), pages 122-146, September.

    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. Harry X. Wu & Deb Kusum Das & K. L. Krishna & Pilu Chandra Das, 2017. "How Does the Productivity and Economic Growth Performance of China and India Compare in the Post-Reform Era, 1981-2011?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 33, pages 91-113, Fall.
    2. Guanghua Wan & Peter J. Morgan & Harry X. Wu, 2016. "Sustainability of China's Growth Model: A Productivity Perspective," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(5), pages 42-70, September.
    3. David Tao,Liang & Harry X,Wu, 2023. "Revisiting the role of ICT in China's growth," IDE Discussion Papers 883, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    4. Li, Kui-Wai & Liu, Tung, 2011. "Economic and productivity growth decomposition: An application to post-reform China," Economic Modelling, Elsevier, vol. 28(1), pages 366-373.
    5. Robert G. Chambers & Simone Pieralli, 2020. "The Sources of Measured US Agricultural Productivity Growth: Weather, Technological Change, and Adaptation," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(4), pages 1198-1226, August.
    6. Dale W. Jorgenson & Marcel P. Timmer, 2011. "Structural Change in Advanced Nations: A New Set of Stylised Facts," Scandinavian Journal of Economics, Wiley Blackwell, vol. 113(1), pages 1-29, March.
    7. K L Krishna & Suresh Chand Aggarwal & Bishwanath Goldar & Deb Kusum Das & Abdul A Erumban & Pilu Chandra Das, 2018. "Trends and Patterns in Labour Quality in India at Sectoral Level," Working papers 285, Centre for Development Economics, Delhi School of Economics.
    8. Dale W. Jorgenson & Mun S. Ho & Jon D. Samuels, 2012. "Information Technology and US Productivity Growth: Evidence from a Prototype Industry Production Account," Chapters, in: Matilde Mas & Robert Stehrer (ed.), Industrial Productivity in Europe, chapter 2, Edward Elgar Publishing.
    9. Harry X. WU & David T. LIANG, 2017. "Accounting for the Role of Information and Communication Technology in China's Productivity Growth," Discussion papers 17111, Research Institute of Economy, Trade and Industry (RIETI).
    10. Harry X Wu, 2016. "China's Institutional Impediments to Productivity Growth," RBA Annual Conference Volume (Discontinued), in: Iris Day & John Simon (ed.),Structural Change in China: Implications for Australia and the World, Reserve Bank of Australia.
    11. Rosés, Joan R., 2008. "Proximate causes of economic growth in Spain, 1850-2000," IFCS - Working Papers in Economic History.WH wp08-12, Universidad Carlos III de Madrid. Instituto Figuerola.
    12. Dariusz Cezary Kotlewski, 2023. "The soundness of returning to manufacturing through the lens of productivity accounting," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 3, pages 253-274.
    13. Claudio Aravena F. & André A. Hofman & Luis Eduardo Escobar F., 2018. "Fuentes del crecimiento económico y la productividad en América Latina y el Caribe, 1990-2013," Journal Economía Chilena (The Chilean Economy), Central Bank of Chile, vol. 21(1), pages 034-066, April.
    14. Carol A. Corrado & Charles R. Hulten, 2014. "Innovation Accounting," NBER Chapters, in: Measuring Economic Sustainability and Progress, pages 595-628, National Bureau of Economic Research, Inc.
    15. Zvi Griliches, 1996. "The Discovery of the Residual: A Historical Note," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1324-1330, September.
    16. Francesco Venturini, 2005. "How Much Does IT Consumption Matter for Growth? Evidence from National Accounts," Rivista di Politica Economica, SIPI Spa, vol. 95(1), pages 57-110, January-F.
    17. Harry WU, 2015. "Constructing China's Net Capital and Measuring Capital Services in China, 1980-2010," Discussion papers 15006, Research Institute of Economy, Trade and Industry (RIETI).
    18. Thirtle, Colin, 1986. "Problems in the Definition and Measurement of Technical Change and Productivity Growth in the U.K. Agricultural Sector," Manchester Working Papers in Agricultural Economics 232790, University of Manchester, School of Economics, Agricultural Economics Department.
    19. Erauskin-Iurrita, Iñaki, 2008. "The sources of economic growth in the Basque Country, Navarre and Spain during the period 1986-2004," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 12, pages 35-58.
    20. Raquel Ortega‐Argilés & Mariacristina Piva & Marco Vivarelli, 2014. "The transatlantic productivity gap: Is R&D the main culprit?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 47(4), pages 1342-1371, November.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:eti:dpaper:15048. 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: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    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.