Analysis of regional productivity growth in China: A generalized metafrontier MPI approach
AbstractThis paper analyzes the dynamics of China's productivity for the period 1996-2004 with a newly developed methodology -- generalized metafrontier Malmquist productivity index (gMMPI). Implementing the gMMPI, this paper reviews the inequality of the coastal and non-coastal provinces, as well as the latent impact of scale efficiency change (SEC) for China. Using provincial data for the years 1996-2004, the empirical results are as follows. On average, China demonstrates an annual 3.191% productivity change, which is lower than 4.729% for the conventional MPI and accounts for about 26.508% of output growth over the period 1996-2004. Most of this change is propelled by technical progress, while a fraction is driven by the adjustment in production scale, and the efficiency change has an adverse effect. Furthermore, regional inequality is also found in this empirical work, and the productivity change of the coastal region is actually stronger than that of the non-coastal region. This paper also casts some focus on the China Western Development policy. Indeed, we do not find any outstanding achievement from the policy in the sample period, except that the west region sustained its rate of productivity change after 2000. Moreover, the SEC is found to be trivial in the advanced coastal region, but plays an important role in the relatively laggard non-coastal region. The implication of the positive SEC in the non-coastal region means that China's Western Development policy will improve the scale efficiency and the TFP growth of the west region.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Elsevier in its journal China Economic Review.
Volume (Year): 20 (2009)
Issue (Month): 4 (December)
Contact details of provider:
Web page: http://www.elsevier.com/locate/chieco
Productivity Metafrontier China;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Banker, Rajiv D., 1984. "Estimating most productive scale size using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 17(1), pages 35-44, July.
- Young, Alwyn, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 641-80, August.
- Kanbur, Ravi & Zhang, Xiaobo, 2004.
"Fifty Years of Regional Inequality in China: A Journey through Central Planning, Reform, and Openness,"
Working Paper Series
UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Ravi Kanbur & Xiaobo Zhang, 2005. "Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 87-106, 02.
- Ravi Kanbur & Xiaobo Zhang, 2004. "Fifty Years of Regional Inequality in China: A Journey Through Central Planning, Reform and Openness," Working Papers 158, Institute for Social and Economic Change, Bangalore.
- Luis Orea, 2002. "Parametric Decomposition of a Generalized Malmquist Productivity Index," Journal of Productivity Analysis, Springer, vol. 18(1), pages 5-22, July.
- Kui-Wai Li & Tung Liu & Lihong Yun, 2008. "Decomposition of Economic and Productivity Growth in Post-reform China," Working Papers 200806, Ball State University, Department of Economics, revised Dec 2008.
- Fare, Rolf & Shawna Grosskopf & Mary Norris & Zhongyang Zhang, 1994. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries," American Economic Review, American Economic Association, vol. 84(1), pages 66-83, March.
- Yao, Shujie & Zhang, Zongyi, 2001. "On Regional Inequality and Diverging Clubs: A Case Study of Contemporary China," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 466-484, September.
- Ray, Subhash C & Desli, Evangelia, 1997. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries: Comment," American Economic Review, American Economic Association, vol. 87(5), pages 1033-39, December.
- Mohsin S. Khan & Zuliu Hu, 1996.
"Why is China Growing so Fast?,"
IMF Working Papers
96/75, International Monetary Fund.
- Wu, Yanrui, 2000. "Is China's economic growth sustainable? A productivity analysis," China Economic Review, Elsevier, vol. 11(3), pages 278-296.
- Nazrul Islam & Erbiao Dai & Hiroshi Sakamoto, 2006. "Role of TFP in China's Growth ," Asian Economic Journal, East Asian Economic Association, vol. 20(2), pages 127-159, 06.
- Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity," Econometrica, Econometric Society, vol. 50(6), pages 1393-1414, November.
- Wang, Yan & Yao, Yudong, 2003. "Sources of China's economic growth 1952-1999: incorporating human capital accumulation," China Economic Review, Elsevier, vol. 14(1), pages 32-52.
- Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
- Christopher O’Donnell & D. Rao & George Battese, 2008. "Metafrontier frameworks for the study of firm-level efficiencies and technology ratios," Empirical Economics, Springer, vol. 34(2), pages 231-255, March.
- Shiu, Alice & Heshmati, Almas, 2006.
"Technical Change and Total Factor Productivity Growth for Chinese Provinces: A Panel Data Analysis,"
Ratio Working Papers
98, The Ratio Institute.
- Shiu, Alice & Heshmati, Almas, 2006. "Technical Change and Total Factor Productivity Growth for Chinese Provinces: A Panel Data Analysis," IZA Discussion Papers 2133, Institute for the Study of Labor (IZA).
- 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.
- Bert Balk, 2001. "Scale Efficiency and Productivity Change," Journal of Productivity Analysis, Springer, vol. 15(3), pages 159-183, May.
- Diewert, W. E., 1976. "Exact and superlative index numbers," Journal of Econometrics, Elsevier, vol. 4(2), pages 115-145, May.
- McMillan, John & Whalley, John & Zhu, Lijing, 1989. "The Impact of China's Economic Reforms on Agricultural Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 781-807, August.
- Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
- Haizheng Li & Barbara M. Fraumeni & Zhiqiang Liu & Xiaojun Wang, 2009. "Human Capital In China," NBER Working Papers 15500, National Bureau of Economic Research, Inc.
- Borensztein, Eduardo & Ostry, Jonathan D, 1996. "Accounting for China's Growth Performance," American Economic Review, American Economic Association, vol. 86(2), pages 224-28, May.
- George E. Battese & D. S. Prasada Rao, 2002. "Technology Gap, Efficiency, and a Stochastic Metafrontier Function," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 87-93, August.
- Rolf Färe & Shawna Grosskopf & Dimitri Margaritis, 2006. "Productivity Growth and Convergence in the European Union," Journal of Productivity Analysis, Springer, vol. 25(1), pages 111-141, 04.
- Shujie Yao, 2006. "On economic growth, FDI and exports in China," Applied Economics, Taylor & Francis Journals, vol. 38(3), pages 339-351.
- Zhou, Xianbo & Li, Kui-Wai & Li, Qin, 2010.
"An Analysis on Technical Efficiency in Post-reform China,"
41034, University Library of Munich, Germany.
- Zhou, Xianbo & Li, Kui-Wai & Li, Qin, 2011. "An analysis on technical efficiency in post-reform China," China Economic Review, Elsevier, vol. 22(3), pages 357-372, September.
- Yuen, Andrew Chi-lok & Zhang, Anming & Cheung, Waiman, 2013. "Foreign participation and competition: A way to improve the container port efficiency in China?," Transportation Research Part A: Policy and Practice, Elsevier, vol. 49(C), pages 220-231.
- Jiang, Yanqing, 2011. "Understanding openness and productivity growth in China: An empirical study of the Chinese provinces," China Economic Review, Elsevier, vol. 22(3), pages 290-298, September.
- Liqun Zhou & Liangke Xia, 2010. "How R&D investments influence TFP growth: Evidence from China’s large and medium-sized industrial enterprises," Frontiers of Economics in China, Springer, vol. 5(4), pages 537-558, December.
- Chen, Shiyi & Jefferson, Gary H. & Zhang, Jun, 2011. "Structural change, productivity growth and industrial transformation in China," China Economic Review, Elsevier, vol. 22(1), pages 133-150, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.