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Productivity growth and convergence across China's industrial economy

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  • Gary Jefferson
  • Thomas Rawski
  • Yifan Zhang

Abstract

Using a firm-level data set for 1998 and 2005 including all of China's 'above designated size' enterprises that together account for more than 85% of China's industrial output, this paper investigates three issues. One key issue in China's industrial system is the extent to which growth has been driven by productivity change. A second issue is the relative productivity performance of enterprises of different ownership types, including a comparison of state-owned versus various forms of non-state ownership. The third issue is whether productivity across China's key regions-coast, northeast, central, and west-exhibits convergence or divergence. One key finding that cuts across all three issues is the exceptional contribution to productivity growth made by exiting and entering firms, much of which is associated with restructuring. During 1998-2005, the phenomenon of firm exit and entry contributed substantially to China's overall industrial productivity growth, to the relatively rapid growth of state industry productivity, and to substantial productivity catch-up with the coastal region by many of the interior provinces.

Suggested Citation

  • Gary Jefferson & Thomas Rawski & Yifan Zhang, 2008. "Productivity growth and convergence across China's industrial economy," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(2), pages 121-140.
    • Handle: RePEc:taf:jocebs:v:6:y:2008:i:2:p:121-140
    DOI: 10.1080/14765280802028237
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    References listed on IDEAS

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    1. Chang-Tai Hsieh, 1999. "Productivity Growth and Factor Prices in East Asia," American Economic Review, American Economic Association, vol. 89(2), pages 133-138, May.
    2. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 641-680.
    3. Alwyn Young, 2003. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1220-1261, December.
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