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Technology Progress, Efficiency, and Scale of Economy in Post-reform China

Author

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  • Kui-Wai Li

    (City University of Hong Kong, Hong Kong SAR)

  • Tung Liu

    (Department of Economics, Ball State University)

  • Lihong Yun

    (City University of Hong Kong, Hong Kong SAR)

Abstract

This paper analyzes the productivity change of the thirty provinces in China’s post-reform economy. The productivity change is estimated from the stochastic frontier model, in which the maximum likelihood estimation is applied to an augmented logarithmic production function incorporated with a human capital variable. The empirical results show technical progress is the main contributor to productivity growth and the scale of economy became important in recent years, but technical efficiency has edged downwards in the sample period. We also found that the physical capital is the important factor for economic growth and human capital is inadequate even though it has a positive and significant effect on growth. The relevant policy implication for a sustainable post-reform China economy is the need to promote human capital accumulation and improvement in technical efficiency.

Suggested Citation

  • Kui-Wai Li & Tung Liu & Lihong Yun, 2007. "Technology Progress, Efficiency, and Scale of Economy in Post-reform China," Working Papers 200701, Ball State University, Department of Economics, revised Apr 2007.
  • Handle: RePEc:bsu:wpaper:200701
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    File URL: http://econfac.bsu.edu/research/workingpapers/bsuecwp200701li.pdf
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    References listed on IDEAS

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    1. Indrajit Bairagya, 2011. "Distinction between Informal and Unorganized Sector: A Study of Total Factor Productivity Growth for Manufacturing Sector in India," Journal of Economics and Behavioral Studies, AMH International, vol. 3(5), pages 296-310.

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    More about this item

    Keywords

    technical efficiency; technical progress; human capital; China economy;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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