Productivity Dynamics of Chinese Manufacturing Firms

Abstract

China has experienced high-speed catch-up growth with an average annual rate of over 8% in per capita GDP in the past four decades. Using growth accounting, Zhu (Understanding China’s growth: Past, present, and future. Journal of Economics Perspectives, 26(4), 103–124) finds that the growth of total factor productivity (TFP) accounts for 77% of China’s per capita GDP growth during 1978–2007, and argues that China’s TFP growth is mainly driven by resource reallocation due to market liberalization and institutional reforms. This paper aims to estimate China’s aggregate productivity growth by applying three leading methods of estimating firm-level production function on Chinese manufacturing firms during 1998–2007, and quantify the contribution of resource reallocation to productivity growth. In addition, we also empirically compare the three estimation methods in this large data set.

Productivity of core infrastructure investment in China: An input–output approach

“…All state‐owned enterprises and non‐state‐owned enterprises with sales revenue above 5 million Chinese Yuan are included, containing detailed information about firm characteristics, output and input, and balance sheet variables. It is a data set that has been widely employed in many empirical studies on various topics through the lens of firm‐level productivity, such as Wu (2018) on capital misallocation, Hsu, Lu, and Wu (2020) on international trade and Feng, Wang, and Wu (2019) on productivity dynamics.…”

“…3.1 | Firm-level data level productivity, such asWu (2018) on capital misallocation, Hsu, Lu, and Wu (2020) on international tradeand Feng, Wang, and Wu (2019) on productivity dynamics.…”