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Comparative Output and Labour Productivity in Manufacturing for China, Japan, Korea and the United States in Circa 1935 by a Production PPP Approach

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  • Fukao, Kyoji
  • 深尾, 京司
  • フカオ, キョウジ
  • Wu, Harry X.
  • Yuan, Tangjun

Abstract

Following the standard methodology for measuring industry-of-origin or productionside PPPs, this study compares the unit values of manufacturing products in China, Japan, Korea and the US to calculate unit value ratios (UVRs) and hence estimates PPPs for individual manufacturing industries using the US as the base country in circa 1935. Based on the products that could be matched between these countries, the estimated manufacturing production PPPs for China, Japan and Korea are only from half to two thirds of the prevailing market exchange rates, suggesting much lower cost of production in manufacturing in these countries than in the US. The estimated PPPs are used to calculate industry-level output and labour productivity in China, Japan and Korea relative to those of the US in circa 1935. The results show that the size of factory manufacturing in Japan was 12 percent of the US level whereas in China it was only one percent and even lower in Korea. In terms of comparative labour productivity, measured as PPP$ per hour worked with the US as the reference, Japanese and Korean manufacturing was 24 and 23 percent of the US level, whereas Chinese manufacturing was only 7 percent of the US level.

Suggested Citation

  • Fukao, Kyoji & 深尾, 京司 & フカオ, キョウジ & Wu, Harry X. & Yuan, Tangjun, 2009. "Comparative Output and Labour Productivity in Manufacturing for China, Japan, Korea and the United States in Circa 1935 by a Production PPP Approach," CEI Working Paper Series 2008-26, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2008-26
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    References listed on IDEAS

    as
    1. Wu, Harry X., 2001. "China's comparative labour productivity performance in manufacturing, 1952-1997: Catching up or falling behind?," China Economic Review, Elsevier, vol. 12(2-3), pages 162-189.
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    9. Kyoji Fukao & Debin Ma & Tangjun Yuan, 2007. "Real Gdp In Pre‐War East Asia: A 1934–36 Benchmark Purchasing Power Parity Comparison With The U.S," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(3), pages 503-537, September.
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    More about this item

    Keywords

    Production (industry-of-origin) purchasing power parity (PPP); unit value ratio; comparative output and labour productivity; comparative advantage; economic development;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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