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Resource allocation and productivity across provinces in China

Peng Bin, Xiaolan Chen, Andrea Fracasso () and Chiara Tomasi

International Review of Economics & Finance, 2018, vol. 57, issue C, 103-113

Abstract: The rapid economic development in China has been characterized by levels of productivity very heterogeneous across local areas. This work investigates a previously unexplored aspect of such heterogeneity by assessing the degree of within-industry allocative efficiency across provinces over the period 1998–2007. Using firm-level data on the Chinese manufacturing firms, we measure resource misallocation by computing the within-industry covariance between size and productivity at the provincial level. The results suggest that allocative efficiency varies considerably across areas and that some place-based factors strongly influence the distribution of resources across firms.

Keywords: Allocative efficiency; Resource allocation; Regional disparities; China (search for similar items in EconPapers)
JEL-codes: D24 L25 O47 (search for similar items in EconPapers)
Date: 2018
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