EconPapers    
Economics at your fingertips  
 

Factor Market Distortions Across Time, Space, and Sectors in China

Loren Brandt (), Trevor Tombe () and Xiaodong Zhu ()

Review of Economic Dynamics, 2013, vol. 16, issue 1, 39-58

Abstract: In this paper, we measure TFP losses in China's non-agricultural economy associated with labour and capital misallocation across provinces and sectors between 1985-2007. We also decompose the overall loss into factor market distortions within provinces (between state and non-state sectors) and distortions between provinces (within sectors). Over the entire period, misallocation lowers aggregate non-agricultural TFP by an average of twenty percent. However, after initially declining, these losses increased appreciably beginning in the mid-1990s. This reversal can be attributed almost exclusively to increasing misallocation of capital between state and non-state sectors within provinces, while losses from between province misallocation remained fairly constant. We argue that the recent increase in capital market distortions is related to government policies that encourage investments in the state sector at the expense of investments in the more productive non-state sector. (Copyright: Elsevier)

Keywords: Factor markets; Distortions; Total factor productivity; China (search for similar items in EconPapers)
JEL-codes: O11 O47 O53 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (82) Track citations by RSS feed

Downloads: (external link)
http://dx.doi.org/10.1016/j.red.2012.10.002
Access to full texts is restricted to ScienceDirect subscribers and institutional members. See http://www.sciencedirect.com/ for details.

Related works:
Software Item: Code and data files for "Factor Market Distortions Across Time, Space, and Sectors in China" (2012) Downloads
Working Paper: Factor Market Distortions across Time, Space and Sectors in China (2012) Downloads
Working Paper: Factor Market Distortions Across Time, Space and Sectors in China (2011) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:red:issued:11-95

Ordering information: This journal article can be ordered from
https://www.economic ... ription-information/

DOI: 10.1010/j.red.2012.10.002

Access Statistics for this article

Review of Economic Dynamics is currently edited by Jonathan Heathcote and Vincenzo Quadrini

More articles in Review of Economic Dynamics from Elsevier for the Society for Economic Dynamics Contact information at EDIRC.
Bibliographic data for series maintained by Christian Zimmermann ().

 
Page updated 2020-01-14
Handle: RePEc:red:issued:11-95