Resource allocation and productivity across provinces in China

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

No 2017/02, DEM Working Papers from Department of Economics and Management

Abstract: The rapid economic development in China has been characterized by levels of income and productivity very heterogeneous across local areas. This work investigates a previously unexplored aspect of such heterogeneity by assessing the degree of within-industry allocative e ciency across provinces in China over the period 1998-2007. Using firm-level data from the surveys conducted by the National Bureau of Statistics on the Chinese manufacturing firms, we measure the degree of resource misallocation by computing the within-industry covariance between size and productivity at the provincial level. The results suggest that within-industry allocative e ciency varies considerably across local areas and that some place-based factors strongly influence resources mobility. Our work sheds some light on the mechanisms at play in the distribution of resources in China and it contributes to the literature investigating the degree of allocative effciency.

Keywords: Allocative effciency; Resource allocation; Regional disparities; China (search for similar items in EconPapers)
JEL-codes: D24 F41 L25 O47 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-bec, nep-cna, nep-eff, nep-geo, nep-tid and nep-tra
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Journal Article: Resource allocation and productivity across provinces in China (2018)
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