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Labor Productivity Differences in China 1987-1997: An Interregional Decomposition Analysis

  • Yang, Ling

    (Xi'an Jiaotong U)

  • Lahr, Michael L.

    (Rutgers U)

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 two newly published 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 on recent causes of China's interregional disparity in GDP per capita.

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Article provided by Southern Regional Science Association in its journal Review of Regional Studies.

Volume (Year): 38 (2008)
Issue (Month): 3 ()
Pages: 319-41

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Handle: RePEc:rre:publsh:v:38:y:2008:i:3:p:319-41
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  1. Shuntaro Shishido & Makoto Nobukuni & Kazumi Kawamura & Takahiro Akita & Shunichi Furukawa, 2000. "An International Comparison of Leontief Input-Output Coefficients and its Application to Structural Growth Patterns," Economic Systems Research, Taylor & Francis Journals, vol. 12(1), pages 45-64.
  2. Erik Dietzenbacher & Alex R. Hoen & Bart Los, 2000. "Labor Productivity in Western Europe 1975-1985: An Intercountry, Interindustry Analysis," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 425-452.
  3. Tybout, James R, 1992. "Linking Trade and Productivity: New Research Directions," World Bank Economic Review, World Bank Group, vol. 6(2), pages 189-211, May.
  4. 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.
  5. Wei, Shang-Jin & Wu, Yi, 2001. "Globalization and Inequality: Evidence from within China," CEPR Discussion Papers 3088, C.E.P.R. Discussion Papers.
  6. Cai, Fang & Wang, Dewen & Du, Yang, 2002. "Regional disparity and economic growth in China: The impact of labor market distortions," China Economic Review, Elsevier, vol. 13(2-3), pages 197-212.
  7. Haishun Sun & Ashok Parikh, 2001. "Exports, Inward Foreign Direct Investment (FDI) and Regional Economic Growth in China," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 187-196.
  8. Yang, Dennis Tao, 2002. "What has caused regional inequality in China?," China Economic Review, Elsevier, vol. 13(4), pages 331-334, December.
  9. 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, vol. 13(4), pages 444-465, December.
  10. Meng, Bo & Chao, Qu, 2007. "Application of the Input-Output Decomposition Technique to China's Regional Economies," IDE Discussion Papers 102, Institute of Developing Economies, Japan External Trade Organization(JETRO).
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