A Global View of Productivity Growth in China

Chang-Tai Hsieh and Ralph Ossa

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: We revisit a classic question in international economics: how does a country's productivity growth affect worldwide real incomes through international trade? We first identify the channels through which productivity shocks transmit in a model featuring inter-industry trade as in Ricardo (1817), intra-industry trade as in Krugman (1980), and firm heterogeneity as in Melitz (2003). We then estimate China's productivity growth at the industry level and use our model to quantify what would have happened to real incomes throughout the world if nothing but China's productivity had changed. We find that average real income in the rest of the world increased by a cumulative 0.48% from 1992-2007 due to China's productivity growth. This represents 2.2% of the total income gains to the world.

Keywords: Productivity growth; China (search for similar items in EconPapers)
JEL-codes: F1 F4 O4 (search for similar items in EconPapers)
Date: 2011-02
New Economics Papers: this item is included in nep-dev, nep-eff and nep-opm
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Citations: View citations in EconPapers (108)

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Related works:
Journal Article: A global view of productivity growth in China (2016)
Working Paper: A Global View of Productivity Growth in China (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hst:ghsdps:gd10-166

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