Tertiarization Like China

Xilu Chen (), Guangyu Pei (), Zheng Song () and Fabrizio Zilibotti ()
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Xilu Chen: Lingnan College, Sun Yat-sen University, Guangzhou, China
Guangyu Pei: Department of Economics, The Chinese University of Hong Kong, Shatin, Hong Kong SAR
Zheng Song: Department of Economics, The Chinese University of Hong Kong, Shatin, Hong Kong SAR
Fabrizio Zilibotti: Department of Economics, Yale University, New Haven, Connecticut, USA

Annual Review of Economics, 2023, vol. 15, issue 1, 485-512

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 extends also 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.

Keywords: China; growth accounting; nonhomothetic preferences; consumer services; producer services; tertiarization (search for similar items in EconPapers)
JEL-codes: O11 O14 O53 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1146/annurev-economics-071122-030026

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