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Technical Change and Total Factor Productivity Growth for Chinese Provinces: A Panel Data Analysis

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Author Info
Shiu, Alice () (Hong Kong Polytechnic University)
Heshmati, Almas () (The Ratio Institute)

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Abstract

We present in this paper the panel econometrics estimation approach of measuring the technical change and total factor productivity (TFP) growth of 30 Chinese provinces during the period of 1993 to 2003. The random effects model with heteroscedastic variances has been used for the estimation of the translog production functions. Two alternative formulations of technical change measured by the single time trend and the general index approach are used. Based on the measures of technical change, estimates of TFP growth could be obtained and its determinants were examined using regression analysis. The parametric TFP growth measure is compared with the non-parametric Solow residual. TFP has recorded positive growth for all provinces during the sample period. Regional breakdown shows that the eastern and central regions have higher average TFP growth when compared with the western region. Foreign direct investment (FDI) and information and communication technology (ICT) investment are found to be significant factors contributing to the TFP difference. While these two factors are found to have significant influence on TFP, their influence on production is relatively small compared to traditional inputs of production.

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Publisher Info
Paper provided by The Ratio Institute in its series Ratio Working Papers with number 98.

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Length: 38 pages
Date of creation: 12 May 2006
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Handle: RePEc:hhs:ratioi:0098

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Related research
Keywords: technical change TFP growth provinces China ICT FDI infrastructure

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Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
E22 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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References listed on IDEAS
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.:
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Cited by:
(explanations, 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.)

  1. Almas Heshmati & Rhona Davis, 2007. "The Determinants of Foreign Direct Investment Flows to the Federal Region of Kurdistan," IZA Discussion Papers 3218, Institute for the Study of Labor (IZA). [Downloadable!]
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