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Interregiona;Decomposition of labor productivity differences in China, 1987-1997

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  • Yang, Ling
  • Lahr, Michael/L

Abstract

The literature on regional disparities in China is both broad and deep. Nonetheless much of its focus has been on the effects of trade liberalization and national policies toward investment in interior provinces. Few pieces have examined whether the disparities might simply be due to differences in industry mix, final demand, or even interregional trade. Using multiregional input-output tables and disaggregated employment data, we decompose change in labor productivity growth for seven regions of China between 1987 and 1997 into five partial effects—changes in value added coefficients, direct labor requirements, aggregate production mix, interregional trade, and final demand. Subsequently we summarize the contributions to labor productivity of the different factors at the regional level. In this way, we present a new perspective for recent causes of China’s interregional disparity in GDP per worker.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 8313.

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Date of creation: 04 Apr 2008
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Handle: RePEc:pra:mprapa:8313

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Keywords: Decomposition; input-output analysis; productivity; regional disparity; China;

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  1. Yang, Dennis Tao, 2002. "What has caused regional inequality in China?," China Economic Review, Elsevier, Elsevier, vol. 13(4), pages 331-334, December.
  2. Dietzenbacher, Erik & Hoen, Alex R, 1998. "Deflation of Input-Output Tables from the User's Point of View: A Heuristic Approach," Review of Income and Wealth, International Association for Research in Income and Wealth, International Association for Research in Income and Wealth, vol. 44(1), pages 111-22, March.
  3. Sylvie Demurger & Jeffrey D. Sachs & Wing Thye Woo & Shuming Bao & Gene Chang & Andrew Mellinger, 2002. "Geography, Economic Policy and Regional Development in China," Harvard Institute of Economic Research Working Papers, Harvard - Institute of Economic Research 1950, Harvard - Institute of Economic Research.
  4. Demurger, Sylvie & Sachs, Jeffrey D. & Woo, Wing Thye & BAO, Shuming & Chang, Gene, 2002. "The relative contributions of location and preferential policies in China's regional development: being in the right place and having the right incentives," China Economic Review, Elsevier, Elsevier, vol. 13(4), pages 444-465, December.
  5. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years Of Regional Inequality In China: A Journey Through Revolution, Reform And Openness," Working Papers, Cornell University, Department of Applied Economics and Management 7236, Cornell University, Department of Applied Economics and Management.
  6. Liu, Tung & Li, Kui-Wai, 2006. "Disparity in factor contributions between coastal and inner provinces in post-reform China," China Economic Review, Elsevier, Elsevier, vol. 17(4), pages 449-470.
  7. Shang-Jin Wei & Yi Wu, 2001. "Globalization and Inequality: Evidence from Within China," NBER Working Papers 8611, National Bureau of Economic Research, Inc.
  8. Demurger, Sylvie, 2001. "Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 95-117, March.
  9. Tybout, James R, 1992. "Linking Trade and Productivity: New Research Directions," World Bank Economic Review, World Bank Group, World Bank Group, vol. 6(2), pages 189-211, May.
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