IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v75y2022icp362-377.html

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592622000832
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2022.05.016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Michelangelo Bin & Peter Y K Cheung & Emanuele Crisostomi & Pietro Ferraro & Hugo Lhachemi & Roderick Murray-Smith & Connor Myant & Thomas Parisini & Robert Shorten & Sebastian Stein & Lewi Stone, 2021. "Post-lockdown abatement of COVID-19 by fast periodic switching," PLOS Computational Biology, Public Library of Science, vol. 17(1), pages 1-34, January.
    2. Fan, Shenggen, ed. & Otsuka, Keijiro, ed., 2021. "Agricultural development: New perspectives in a changing world: Synopsis," IFPRI synopses 9780896293854, International Food Policy Research Institute (IFPRI).
    3. Nicholas Bloom & James Liang & John Roberts & Zhichun Jenny Ying, 2015. "Does Working from Home Work? Evidence from a Chinese Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(1), pages 165-218.
    4. Gustavo Adler & Romain A Duval & Davide Furceri & Sinem Kılıç Çelik & Ksenia Koloskova & Marcos Poplawski Ribeiro, 2017. "Gone with the Headwinds; Global Productivity," IMF Staff Discussion Notes 17/04, International Monetary Fund.
    5. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    6. Dixon, John M. & Weerahewa, Jeevika & Hellin, Jon & Rola-Rubzen, Maria Fay & Huang, Jikun & Kumar, Shalander & Das, Anup & Qureshi, Muhammad Ejaz & Krupnik, Timothy J. & Shideed, Kamil & Jat, Mangi L., 2021. "Response and resilience of Asian agrifood systems to COVID-19: An assessment across twenty-five countries and four regional farming and food systems," Agricultural Systems, Elsevier, vol. 193(C).
    7. Fan, Shenggen & Otsuka, Keijiro, 2021. "Agricultural development in a changing world," IFPRI book chapters, in: Agricultural development: New perspectives in a changing world, chapter 1, pages 3-34, International Food Policy Research Institute (IFPRI).
    8. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    9. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
    10. Otsuka, Keijiro & Fan, Shenggen, 2021. "Agricultural development: New perspectives in a changing world," IFPRI books, International Food Policy Research Institute (IFPRI), number 9780896293830.
    11. Ozili, Peterson & Arun, Thankom, 2020. "Spillover of COVID-19: Impact on the Global Economy," MPRA Paper 99317, University Library of Munich, Germany.
    12. Ackerberg, Daniel & Caves, Kevin & Frazer, Garth, 2006. "Structural identification of production functions," MPRA Paper 38349, University Library of Munich, Germany.
    13. Gustavo Adler & Mr. Romain A Duval & Davide Furceri & Ksenia Koloskova & Mr. Marcos Poplawski Ribeiro, 2017. "Gone with the Headwinds: Global Productivity," IMF Staff Discussion Notes 2017/004, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. Xie, Yamin & Li, Yuanguang, 2024. "Technological progress, fiscal policy, and economic fluctuations in China: Evidence from the heterogeneous firm DSGE model during the COVID-19 pandemic," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 646-662.
    3. 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.
    4. 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.
    5. Leng, Aolin & Sun, Yanbing, 2024. "The impact mechanism and breakthrough path of COVID-19 on enterprise financial distress: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 16-31.

    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. Roberto Martino & Phu Nguyen-Van, 2014. "Labour market regulation and fiscal parameters: A structural model for European regions," Working Papers of BETA 2014-19, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    2. Daan Freeman & Leon Bettendorf & Gerrit Hugo van Heuvelen & Gerdien Meijerink, 2024. "Business Dynamics and Productivity Growth in the Netherlands," CESifo Working Paper Series 11071, CESifo.
    3. Yoko KONISHI & Yoshihiko NISHIMURA, 2013. "A Note on the Identification of Demand and Supply Shocks in Production: Decomposition of TFP," Discussion papers 13099, Research Institute of Economy, Trade and Industry (RIETI).
    4. Békés, Gábor & Hornok, Cecília & Muraközy, Balázs, 2016. "Globalization and the markups of European firms," Kiel Working Papers 2044, Kiel Institute for the World Economy (IfW Kiel).
    5. repec:rim:rimwps:17-26 is not listed on IDEAS
    6. Lu, Yunguo & Zhang, Lin, 2022. "National mitigation policy and the competitiveness of Chinese firms," Energy Economics, Elsevier, vol. 109(C).
    7. Amoroso, S., 2013. "Heterogeneity of innovative, collaborative, and productive firm-level processes," Other publications TiSEM f5784a49-7053-401d-855d-1, Tilburg University, School of Economics and Management.
    8. Bena Jan & Ondko Peter & Vourvachaki Evangelia, 2011. "Productivity Gains from Services Liberalization in Europe," EERC Working Paper Series 11/15e, EERC Research Network, Russia and CIS.
    9. Ling Zhu & Dongmin Kong, 2023. "Revenue pressure of local governments and firm productivity: Evidence from a natural experiment in China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(3), pages 721-748, July.
    10. Daan Freeman & Leon Bettendorf & Harro van Heuvelen & Gerdien Meijerink, 2021. "The contribution of business dynamics to productivity growth in the Netherlands," CPB Discussion Paper 427, CPB Netherlands Bureau for Economic Policy Analysis.
    11. Kato, Kengo & Sasaki, Yuya, 2018. "Uniform confidence bands in deconvolution with unknown error distribution," Journal of Econometrics, Elsevier, vol. 207(1), pages 129-161.
    12. Gita Gopinath & Şebnem Kalemli-Özcan & Loukas Karabarbounis & Carolina Villegas-Sanchez, 2017. "Capital Allocation and Productivity in South Europe," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 1915-1967.
    13. Claudiu Tiberiu Albulescu & Camélia Turcu, 2022. "Productivity, financial performance, and corporate governance: evidence from Romanian R&D firms," Applied Economics, Taylor & Francis Journals, vol. 54(51), pages 5956-5975, November.
    14. Chang Xu & Jianbing Guo & Baodong Cheng & Yu Liu, 2019. "Exports, Misallocation, and Total Factor Productivity of Furniture Enterprises," Sustainability, MDPI, vol. 11(18), pages 1-14, September.
    15. Sara L. McGaughey & Pascalis Raimondos & Lisbeth La Cour, 2018. "What is a Foreign Firm? Implications for Productivity Spillovers," CESifo Working Paper Series 7109, CESifo.
    16. Kozo KIYOTA & Toshiyuki MATSUURA & Lionel NESTA, 2016. "Understanding the Cross-country Productivity Gap of Exporters," Discussion papers 16019, Research Institute of Economy, Trade and Industry (RIETI).
    17. Chiacchio, Francesco & Gradeva, Katerina & Lopez-Garcia, Paloma, 2018. "The post-crisis TFP growth slowdown in CEE countries: exploring the role of Global Value Chains," Working Paper Series 2143, European Central Bank.
    18. Kasahara, Hiroyuki & Liang, Yawen & Rodrigue, Joel, 2016. "Does importing intermediates increase the demand for skilled workers? Plant-level evidence from Indonesia," Journal of International Economics, Elsevier, vol. 102(C), pages 242-261.
    19. Carol Newman & John Rand & Finn Tarp, 2016. "Imports, supply chains, and firm productivity," Working Paper Series UNU-WIDER Working Paper w, World Institute for Development Economic Research (UNU-WIDER).
    20. Engidaw Sisay Negash & Wenjie Zhu & Yangyang Lu & Zhikai Wang, 2020. "Does Chinese Inward Foreign Direct Investment Improve the Productivity of Domestic Firms? Horizontal Linkages and Absorptive Capacities: Firm-Level Evidence from Ethiopia," Sustainability, MDPI, vol. 12(7), pages 1-23, April.
    21. Cassiman, Bruno & ,, 2013. "Profiting from Innovation: Firm Level Evidence on Markups," CEPR Discussion Papers 9703, C.E.P.R. Discussion Papers.

    More about this item

    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

    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:eee:ecanpo:v:75:y:2022:i:c:p:362-377. 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: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    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.