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Assessing impact of the COVID-19 pandemic on China’s TFP growth: Evidence from region-level data in 2020

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  • Huang, Kainan
  • Cheng, Baodong
  • Chen, Moyu
  • Sheng, Yu

Abstract

This paper examines the first wave spread of COVID-19 in China and its impact on TFP growth for 2020, and assess the role of anti-epidemic lockdown policy in suppressing the pandemic. Methodologically, we systematically quantify the disparity in the pandemic’s productivity impact and the role of lockdown policies across regions, by combining the prefecture-level TFP growth for 422 regions (including 276 municipal cites and 146 county regions) with the daily statistics on the pandemic. Our results show that the negative impact of the COVID-19 pandemic on TFP growth are more likely to occur in municipal cities, compared to rural areas. Moreover, the anti-epidemic quarantine policy succeeded to bring the COVID-19 pandemic down in China, but it may generate additional costs through dampening TFP growth if overused. Given the regions either with a relative higher resilience level or in the remote rural areas suffered more from the strict regulation. A more flexible policy is required to be designed so as to mitigate the ongoing COVID-19 impacts in future. These findings provide useful insights for China, as well as other Asian developing countries, to cope with its continuing episodes.

Suggested Citation

  • Huang, Kainan & Cheng, Baodong & Chen, Moyu & Sheng, Yu, 2022. "Assessing impact of the COVID-19 pandemic on China’s TFP growth: Evidence from region-level data in 2020," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 362-377.
    • Handle: RePEc:eee:ecanpo:v:75:y:2022:i:c:p:362-377
    DOI: 10.1016/j.eap.2022.05.016
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    Cited by:

    1. Han, Yang, 2022. "The impact of the COVID-19 pandemic on China's economic structure: An input–output approach," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 181-195.
    2. Mallawaarachchi, Thilak & Rahut, Dil Bahadur, 2023. "Realising rural economic transformation: Pathways to inclusive and sustainable prosperity in post-COVID-19 Asia," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 1076-1082.
    3. Jun Qian & Tongda Zhang & Xiao Sun & Yueting Chai, 2023. "The coordination of collective and individual solutions in risk-resistant scenarios," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 96(2), pages 1-15, February.

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    More about this item

    Keywords

    The COVID-19 pandemic; Region-level TFP; Anti-epidemic lockdown policy; Sustainable growth in China;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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