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New Estimates and a Decomposition of Provincial Productivity Change in China

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Abstract

Productivity and efficiency change lies at the heart of some of the key challenges facing China’s economy. This paper contributes to an understanding of TFP change by computing and decomposing provincial-level Hicks-Moorsteen (H-M) total factor productivity (TFP) indexes for the period 1978 to 2008. The H-M index is appealing because, unlike the more commonly-used Malmquist TFP index, it can be decomposed into unambiguous measures of technical change and efficiency change. The efficiency change component can be further decomposed into measures of pure technical, scale and mix efficiency change. We also make use of new capital stock estimates that have been computed using province-specific investment price deflators and capital stock depreciation rates. On average across provinces, we find evidence of moderate TFP growth, as well as large changes in the components of TFP growth over the sample period. Considerable heterogeneity from province to province is also documented both with respect to the rate of TFP growth and its components.

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  • J. Laurenceson & C.J. O’Donnell, 2011. "New Estimates and a Decomposition of Provincial Productivity Change in China," CEPA Working Papers Series WP042011, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uqcepa:64
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    3. Mohammadian, Isaac & Jahangoshai Rezaee, Mustafa, 2020. "A new decomposition and interpretation of Hicks-Moorsteen productivity index for analysis of Stock Exchange companies: Case study on pharmaceutical industry," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).
    4. Ioanna Reziti & Leonidas Zangelidis, 2019. "Regional Productivity and Efficiency Growth in Greek Agriculture," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 69(4), pages 3-20, October-D.
    5. Ding Lu, 2011. "Transition of China’s growth pattern," Frontiers of Economics in China, Springer;Higher Education Press, vol. 6(4), pages 535-555, December.
    6. Zhaodan Wu & Yi Zhang & Yu Hua & Quanliang Ye & Lixiao Xu & Shiqi Wang, 2020. "An Improved System Dynamics Model to Evaluate Regional Water Scarcity from a Virtual Water Perspective: A Case Study of Henan Province, China," Sustainability, MDPI, vol. 12(18), pages 1-35, September.
    7. Reziti, Ioanna, 2019. "Total factor productivity change of agriculture in five Southern European countries," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 0(Issue 2).
    8. James Laurenceson, 2016. "Discussion of 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.
    9. Gottwald-Belinic, Martina, 2021. "Productivity gap and Factor misallocation in Chinese manufacturing sector – micro perspective," MPRA Paper 110372, University Library of Munich, Germany.
    10. C.J. O'Donnell & S. Fallah-Fini & K, Triantis, 2011. "Comparing Firm Performance Using Transitive Productivity Index Numbers in a Meta-frontier Framework," CEPA Working Papers Series WP082011, School of Economics, University of Queensland, Australia.
    11. Constant, Labintan Adeniyi & Shijun, Ding, 2012. "Benin Agriculture Productivity and profitability Measurement," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126748, International Association of Agricultural Economists.
    12. María Molinos-Senante & Alexandros Maziotis & Ramon Sala-Garrido, 2017. "Assessment of the Total Factor Productivity Change in the English and Welsh Water Industry: a Färe-Primont Productivity Index Approach," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 31(8), pages 2389-2405, June.
    13. Lijiu Zhao & Tao Jin & Lintao Qin & Zaijun Li, 2023. "Chinese Agriculture for “Green and Grain” Productivity Growth: Evidence from Jiangsu Province," Sustainability, MDPI, vol. 15(24), pages 1-14, December.
    14. Dai, Xiaoyong & Sun, Zao, 2021. "Does firm innovation improve aggregate industry productivity? Evidence from Chinese manufacturing firms," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 1-9.
    15. John Gibson & Chao Li, 2018. "The “Belt and Road Initiative†and comparative regional productivity in China," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 5(2), pages 168-181, May.
    16. Dai, Xiaoyong & Cheng, Liwei, 2019. "Aggregate productivity losses from factor misallocation across Chinese manufacturing firms," Economic Systems, Elsevier, vol. 43(1), pages 30-41.
    17. Gao, Yuning & Zhang, Meichen & Zheng, Jinghai, 2021. "Accounting and determinants analysis of China's provincial total factor productivity considering carbon emissions," China Economic Review, Elsevier, vol. 65(C).
    18. Kluge, Jan & Lappoehn, Sarah & Plank, Kerstin, 2020. "The Determinants of Economic Competitiveness," IHS Working Paper Series 24, Institute for Advanced Studies.

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    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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