The determinants of productivity in Chinese large and medium-sized industrial firms, 1998-2007

Ding, S.; Guariglia, A.; Harris, R.

Abstract

Using a large firm-level dataset, this paper examines total factor productivity (TFP) and its determinants in China. Our preferred GMM estimation results indicate increasing returns to scale in most industries and a usually large positive trend representing technical change. Various firm characteristics such as age, ownership, political affiliation, export behavior, liquidity, and geographic location are included in the production function. Our results show that in the context of China’s institutional background, including such factors is important when estimating TFP. The average TFP growth in Chinese industries is 9.6 % per annum during the period 1998–2007, and is mainly driven by firm entry. The sub-sector decomposition exercises show that the inter-firm resource reallocations are more prominent across industries than across provinces.

Citation

Ding, S., Guariglia, A., & Harris, R. (2016). The determinants of productivity in Chinese large and medium-sized industrial firms, 1998-2007. Journal of Productivity Analysis, 45(2), 131-155. https://doi.org/10.1007/s11123-015-0460-0

• Journal Article Type: Article
• Acceptance Date: Oct 17, 2014
• Online Publication Date: Oct 24, 2015
• Publication Date: Apr 1, 2016
• Deposit Date: Oct 26, 2015
• Publicly Available Date: Oct 28, 2015
• Journal: Journal of Productivity Analysis
• Print ISSN: 0895-562X
• Electronic ISSN: 1573-0441
• Publisher: Springer
• Peer Reviewed: Peer Reviewed
• Volume: 45
• Issue: 2
• Pages: 131-155
• DOI: https://doi.org/10.1007/s11123-015-0460-0
• Keywords: TFP, Productivity decomposition, Entry, Exit, Reallocation of resources, China.
• Public URL: https://durham-repository.worktribe.com/output/1428030