IDEAS home Printed from https://ideas.repec.org/a/mes/chinec/v43y2010i1p44-70.html
   My bibliography  Save this article

Factor Reallocation Effect and Productivity in China's Economic Growth, 1985-2007

Author

Listed:
  • Zhanqi Yao

Abstract

How to accurately calculate China's factor reallocation effect and objectively assess its impact on economic and productivity growth is an unsolved problem. This study has two objectives: to identify the trend of productivity growth and to quantify the contribution of sectoral factor reallocation to aggregate productivity growth rate since the 1980s. This is accomplished by estimating a Cobb-Douglas production function and decomposing aggregate productivity growth using official Chinese data. Based on the panel data of six main sectors making up the entire economy and fourteen individual industries constituting the entire manufacturing sector, the results show that productivity, especially total factor productivity, has been disappointing in recent years after rapid growth in the early post-reform period. The factor reallocation effect is trivial in the economic reform era, indicating growth potential in the mid-industrialization stage. In the long run, therefore, policymakers must adjust China's economic programs to foster sustained productivity growth and to improve factor flows among economic sectors.

Suggested Citation

  • Zhanqi Yao, 2010. "Factor Reallocation Effect and Productivity in China's Economic Growth, 1985-2007," Chinese Economy, Taylor & Francis Journals, vol. 43(1), pages 44-70, January.
    • Handle: RePEc:mes:chinec:v:43:y:2010:i:1:p:44-70
    as

    Download full text from publisher

    File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=P736P7L900715411
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Holz, Carsten A. & Lin, Yi-min, 2001. "The 1997-1998 break in industrial statistics: Facts and appraisal," China Economic Review, Elsevier, vol. 12(4), pages 303-316.
    2. Zuliu F. Hu & Mohsin S. Khan, 1997. "Why Is China Growing So Fast?," IMF Staff Papers, Palgrave Macmillan, vol. 44(1), pages 103-131, March.
    3. Carsten A. Holz, 2004. "China's Statistical System in Transition: Challenges, Data Problems, and Institutional Innovations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 381-409, September.
    4. Ding Lu, 2002. "Sectoral Factor Reallocation And Productivity Growth: Recent Trends In The Chinese Economy," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 27(2), pages 95-111, December.
    5. 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.
    6. Carsten A. Holz, 2006. "CHINA's REFORM PERIOD ECONOMIC GROWTH: HOW RELIABLE ARE ANGUS MADDISON's ESTIMATES?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 85-119, March.
    Full references (including those not matched with items on IDEAS)

    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. Zheng, Jinghai & Bigsten, Arne & Hu, Angang, 2009. "Can China's Growth be Sustained? A Productivity Perspective," World Development, Elsevier, vol. 37(4), pages 874-888, April.
    2. Liu, Tung & Li, Kui-Wai, 2006. "Disparity in factor contributions between coastal and inner provinces in post-reform China," China Economic Review, Elsevier, vol. 17(4), pages 449-470.
    3. Lu, Jiangyong & Tao, Zhigang, 2009. "Trends and determinants of China's industrial agglomeration," Journal of Urban Economics, Elsevier, vol. 65(2), pages 167-180, March.
    4. Sinclair, Tara M., 2019. "Characteristics and implications of Chinese macroeconomic data revisions," International Journal of Forecasting, Elsevier, vol. 35(3), pages 1108-1117.
    5. Dollar, David & Kraay, Aart, 2006. "Neither a borrower nor a lender: Does China's zero net foreign asset position make economic sense?," Journal of Monetary Economics, Elsevier, vol. 53(5), pages 943-971, July.
    6. Glawe, Linda & Wagner, Helmut, 2020. "China in the middle-income trap?," China Economic Review, Elsevier, vol. 60(C).
    7. Miaojie Yu, 2010. "Processing Trade, Firm's Productivity, and Tariff Reductions : Evidence from Chinese Products," Macroeconomics Working Papers 22799, East Asian Bureau of Economic Research.
    8. Kerola, Eeva, 2018. "In search of fluctuations : Another look at China’s incredibly stable GDP growth," BOFIT Discussion Papers 23/2018, Bank of Finland, Institute for Economies in Transition.
    9. John Knight & Sai Ding, 2008. "Why has China Grown so Fast? The Role of Structural Change," Economics Series Working Papers 415, University of Oxford, Department of Economics.
    10. WU, Jidong & LI, Ning & SHI, Peijun, 2014. "Benchmark wealth capital stock estimations across China's 344 prefectures: 1978 to 2012," China Economic Review, Elsevier, vol. 31(C), pages 288-302.
    11. Scherngell, Thomas & Borowiecki, Martin & Hu, Yuanjia, 2014. "Effects of knowledge capital on total factor productivity in China: A spatial econometric perspective," China Economic Review, Elsevier, vol. 29(C), pages 82-94.
    12. 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, June.
    13. Chong-En Bai & Chang-Tai Hsieh & Yingyi Qian, 2006. "The Return to Capital in China," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 37(2), pages 61-102.
    14. repec:zbw:bofitp:2011_001 is not listed on IDEAS
    15. Dale W. Jorgenson & Khuong Vu, 2007. "Information Technology and the World Growth Resurgence," German Economic Review, Verein für Socialpolitik, vol. 8, pages 125-145, May.
    16. Minzhe Du & Bing Wang & Yanrui Wu, 2014. "Sources of China’s Economic Growth: An Empirical Analysis Based on the BML Index with Green Growth Accounting," Sustainability, MDPI, vol. 6(9), pages 1-22, September.
    17. Tara Sinclair & Yeuqing Jia, 2010. "Permanent and Transitory Macroeconomic Relationships between China and the Developed World," Working Papers 2010-08, The George Washington University, Institute for International Economic Policy.
    18. Chamon, Marcos & de Carvalho Filho, Irineu, 2014. "Consumption based estimates of urban Chinese growth," China Economic Review, Elsevier, vol. 29(C), pages 126-137.
    19. Tian, Xu & Yu, Xiaohua, 2012. "The Enigmas of TFP in China: A meta-analysis," China Economic Review, Elsevier, vol. 23(2), pages 396-414.
    20. Holz, Carsten A., 2008. "China's Economic Growth 1978-2025: What We Know Today About China's Economic Growth Tomorrow," World Development, Elsevier, vol. 36(10), pages 1665-1691, October.
    21. Wanping Yang & Jinkai Zhao, 2018. "Sources of China’s Economic Growth: A Case for Green Accounting," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 8(2), pages 1-3.

    More about this item

    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:mes:chinec:v:43:y:2010:i:1:p:44-70. 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MCES20 .

    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.