New estimates and a decomposition of provincial productivity change in China

Abstract

Productivity and efficiency change lies at the heart of achieving sustainable growth in China. This paper computes and decomposes provincial-level Färe-Primont TFP indexes for the period 1978 to 2010. On average across provinces, we find evidence of rapid TFP growth mostly due to technical change, but with changes in scale-mix efficiency also playing a supplementary role. Considerable heterogeneity from province to province is also documented both with respect to the rate of TFP growth and its components. Policy implications are discussed. © 2014 Elsevier Inc.