Economic and Productivity Growth Decomposition: An Application to Post-reform China

Kui-Wai Li () and Tung Liu ()

No 200904, Working Papers from Ball State University, Department of Economics

Abstract: This paper examines and applies the theoretical foundation of the decomposition of economic and productivity growth to the thirty provinces in China’s post-reform economy. The four attributes of economic growth are input growth, adjusted scale effect, technical progress, and efficiency growth. A stochastic frontier model with a translog production and incorporated with human capital is used to estimate the growth attributes in China. The empirical results show that input growth is the major contributor to economic growth and human capital is inadequate even though it has a positive and significant effect on growth. Technical progress is the main contributor to productivity growth and the scale effect has become important in recent years. The impact of technical inefficiency is statistical insignificant in the sample period. The relevant policy implication for a sustainable post-reform China economy is the need to promote human capital accumulation and improvement in technical efficiency.

Keywords: technical progress; technical efficiency; economies of scale; human capital; China economy (search for similar items in EconPapers)
JEL-codes: C2 D24 O4 O53 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2009-09, Revised 2008-09
New Economics Papers: this item is included in nep-dev, nep-eff, nep-fdg, nep-hrm and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Forthcoming in Economic Modelling

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http://econfac.bsu.edu/research/workingpapers/bsuecwp200904li.pdf First version, 2009 (application/pdf)

Related works:
Journal Article: Economic and productivity growth decomposition: An application to post-reform China (2011)
Journal Article: Economic and productivity growth decomposition: An application to post-reform China (2011)
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