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Sources of China’s Economic Growth: An Empirical Analysis Based on the BML Index with Green Growth Accounting

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  • Minzhe Du

    (Economic Department, School of Economics, Jinan University, Guangzhou 510632, China)

  • Bing Wang

    (Economic Department, School of Economics, Jinan University, Guangzhou 510632, China)

  • Yanrui Wu

    (Economic Department, School of Economics, Jinan University, Guangzhou 510632, China
    Business School, University of Western Australia, Crawley WA 6009, Australia)

Abstract

This study develops a biennial Malmquist–Luenberger productivity index that is used to measure the sources of economic growth by utilizing data envelopment analysis and the directional distance function. Taking restrictions on resources and the environment into account based on the green growth accounting framework; we split economic growth into seven components: technical efficiency change, technological change, labor effect, capital effect, energy effect, output structure effect and environmental regulation effect. Further, we apply the Silverman test and Li-Fan-Ullah nonparametric test in combination with kernel distribution to test for the counterfactual contributions at the provincial level in China from 1998 to 2012. The empirical results show that: (1) technological progress and TFP make positive contributions to economic growth in China, while technical efficiency drags it down; (2) the effect of output structure and CO 2 emissions with environmental regulation restrain economic growth in some provinces; and (3) overall, physical capital accumulation is the most important driving force for economic take-off, irrespective of whether the government adopts environmental regulations.

Suggested Citation

  • 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.
  • Handle: RePEc:gam:jsusta:v:6:y:2014:i:9:p:5983-6004:d:39966
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