Tertiarization Like China

Xilu Chen, Guangyu Pei, Zheng Michael Song and Fabrizio Zilibotti

No 30272, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This article documents a rapid shift toward services (tertiarization) of the Chinese economy since 2005, as evidenced by the significant increase in both employment and value-added shares of the service sector. Notably, our analysis reveals that a variety of measures of productivity growth have been greater in the service sector than in the manufacturing sector. Firm-level measures of dynamism corroborate this ongoing tertiarization trend, which is not limited to services used as inputs to industrial production but also extends to consumer services. These findings are robust across different growth accounting methodologies, including a recently proposed method by Fan et al. (2023) that addresses challenges associated with the measurement of quality improvements in service industries.

JEL-codes: O11 O14 O47 O53 (search for similar items in EconPapers)
Date: 2022-07
New Economics Papers: this item is included in nep-cna and nep-tra
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Published as accepted for publication in the Annual Review of Economics
Published as Xilu Chen & Guangyu Pei & Zheng Song & Fabrizio Zilibotti, 2023. "Tertiarization Like China," Annual Review of Economics, vol 15(1).

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