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Real exchange rate and productivity in China

Author

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  • Sylviane GUILLAUMONT JEANNENEY

    () (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Ping HUA

    () (Centre National de la Recherche Scientifique(CNRS))

Abstract

This article investigates the impact that the real exchange rate appreciation in China has exerted on productivity growth since 1994. We remind the arguments explaining a positive or a negative impact of a real appreciation on efficiency and on technical progress. DEA Malmquist indices of productivity growth and of its two components are calculated for twenty-nine Chinese provinces. The econometric estimation shows that the appreciation of the real exchange rate had an unfavourable effect on technical progress but a favourable effect on efficiency growth, and these two effects offset each other partially to give a lesser negative effect on productivity growth.

Suggested Citation

  • Sylviane GUILLAUMONT JEANNENEY & Ping HUA, 2003. "Real exchange rate and productivity in China," Working Papers 200328, CERDI.
  • Handle: RePEc:cdi:wpaper:452
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    File URL: http://publi.cerdi.org/ed/2003/2003.28.pdf
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    References listed on IDEAS

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    1. Guillaumont Jeanneney, S. & Hua, P., 2001. "How does real exchange rate influence income inequality between urban and rural areas in China?," Journal of Development Economics, Elsevier, vol. 64(2), pages 529-545, April.
    2. Guillaumont Jeanney, Sylviane & HUA, Ping, 2002. "The Balassa-Samuelson effect and inflation in the Chinese provinces," China Economic Review, Elsevier, vol. 13(2-3), pages 134-160.
    3. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584-584.
    4. Caves, Douglas W & Christensen, Laurits R & Diewert, W Erwin, 1982. "Multilateral Comparisons of Output, Input, and Productivity Using Superlative Index Numbers," Economic Journal, Royal Economic Society, vol. 92(365), pages 73-86, March.
    5. Lu, Ding & Yu, Qiao, 1999. "Hong Kong's exchange rate regime:: Lessons from Singapore," China Economic Review, Elsevier, vol. 10(2), pages 122-140.
    6. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    7. K.P. Kalirajan & M.B. Obwona & S. Zhao, 1996. "A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth before and after Reforms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 331-338.
    8. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    9. Yue, Changjun & Hua, Ping, 2002. "Does comparative advantage explains export patterns in China?," China Economic Review, Elsevier, vol. 13(2-3), pages 276-296.
    10. Nishimizu, Mieko & Page, John M, Jr, 1982. "Total Factor Productivity Growth, Technological Progress and Technical Efficiency Change: Dimensions of Productivity Change in Yugoslavia, 1965-78," Economic Journal, Royal Economic Society, vol. 92(368), pages 920-936, December.
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    Cited by:

    1. Romain Veyrune, 2005. "Le prix de la fixité : Application à l'Union monétaire des Caraïbes orientales et à la Zone franc," Mondes en développement, De Boeck Université, vol. 130(2), pages 63-76.
    2. Ping HUA, 2004. "Compétitivité-prix des exportations chinoises sur les marchés des pays industrialisés," Working Papers 200417, CERDI.
    3. Sylviane GUILLAUMONT JEANNENEY & PING HUA & ZHICHENG LIANG, 2006. "Financial Development, Economic Efficiency, And Productivity Growth: Evidence From China," The Developing Economies, Institute of Developing Economies, vol. 44(1), pages 27-52.

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