Estimating and Decomposing the TFP Growth of Service-Oriented Manufacturing in China: A Translogarithmic Stochastic Frontier Approach

Maliyamu Abudureheman, Qingzhe Jiang, Jiong Gong and Abulaiti Yiming ()
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Maliyamu Abudureheman: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Qingzhe Jiang: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Jiong Gong: School of International Trade and Economics, University of International Business and Economics, Beijing 100029, China
Abulaiti Yiming: School of Business, Xinjiang Normal University, Urumqi 830017, China

Sustainability, 2023, vol. 15, issue 7, 1-20

Abstract: By constructing a translogarithmic stochastic frontier production model, this study explores the total factor productivity (TFP) of service-oriented manufacturing in 30 provinces in China during 2004–2020. We carried out decomposition analysis to understand in greater depth the potential drivers of TFP growth. The results show that the overall TFP of service-oriented manufacturing continuously improved during the sample period; however, the overall growth rate showed a significant slowing trend, and the contribution of TFP growth to output growth is still low. The industrial growth of service-oriented manufacturing is mainly driven by capital input, and the transformation of its growth mode from extensive to intensive has not yet been realized. Furthermore, there exists significant regional and sub-sectoral heterogeneity in the TFP growth of the industry. The decomposition of TFP growth shows that technological progress and technical efficiency are the main sources of TFP growth, but the growth rate of technological progress is declining gradually, and its driving effect on TFP is weakening. The deterioration of both scale and allocation efficiency hinders the improvement of TFP in service-oriented manufacturing, and there is still room for the industry to improve its TFP level by improving scale efficiency and allocation efficiency.

Keywords: TFP growth; service-oriented manufacturing; stochastic frontier analysis; decomposition analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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