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Spatial characteristics and dynamics of provincial total factor productivity in China

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  • Shujin Zhu
  • Mingyong Lai
  • Xiaolan Fu

Abstract

This paper explores the influence of spatial effects on the convergence of total factor productivity (TFP) across Chinese regions. We use the Moran index, Markov transition matrix and panel data techniques to analyse spatial dependence, transition dynamics and disparities in TFP across Chinese provinces over the period from 1978 to 2004. We find that in the period following 1978, there has been an increase in spatial dependence in provincial-level TFPs across the various regions in China. However, the extent of this dependence is not the same across regions and the direction of movement of provincial TFP does not show convergence. On the contrary, provincial TFPs at the middle quintile level moved to the quintile levels at the highest and lowest levels, suggesting divergence and polarization in TFP across Chinese regions. The 'New Eastern Region' appears to be a TFP convergence club over the sampling period but no evidence is found suggesting convergence of TFP between provinces in the other subgroups. Policy implications are discussed.

Suggested Citation

  • Shujin Zhu & Mingyong Lai & Xiaolan Fu, 2008. "Spatial characteristics and dynamics of provincial total factor productivity in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 6(2), pages 197-217.
  • Handle: RePEc:taf:jocebs:v:6:y:2008:i:2:p:197-217
    DOI: 10.1080/14765280802028328
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    References listed on IDEAS

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    1. Joseph Byrne & Giorgio Fazio & Davide Piacentino, 2005. "Convergence in TFP among Italian Regions - Panel Unit Roots with Heterogeneity and Cross Sectional Dependence," ERSA conference papers ersa05p591, European Regional Science Association.
    2. Patricio Aroca & Dong Guo & Geoffrey J. D. Hewings, 2006. "Spatial Convergence in China: 1952-99," WIDER Working Paper Series RP2006-89, World Institute for Development Economic Research (UNU-WIDER).
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    Cited by:

    1. Peng Bin, 2016. "Dynamic Development of Regional Disparity in Mainland China: An Experimental Study Based on a Multidimensional Index," Sustainability, MDPI, vol. 8(12), pages 1-28, December.
    2. Pedro Naso Author name: Tim Swanson, 2017. "How Does Environmental Regulation Shape Economic Development? A Tax Competition Model of China," CIES Research Paper series 54-2017, Centre for International Environmental Studies, The Graduate Institute.
    3. Cheong, Tsun Se & Wu, Yanrui, 2018. "Convergence and transitional dynamics of China's industrial output: A county-level study using a new framework of distribution dynamics analysis," China Economic Review, Elsevier, vol. 48(C), pages 125-138.
    4. David A. Ralston & Carolyn P. Egri & Charlotte M. Karam & Yongjuan Li & Ping Ping Fu, 2018. "Changes in work values across the regions of China," Asia Pacific Journal of Management, Springer, vol. 35(1), pages 145-179, March.
    5. Laurenceson, James & O'Donnell, Christopher, 2014. "New estimates and a decomposition of provincial productivity change in China," China Economic Review, Elsevier, vol. 30(C), pages 86-97.

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