Total Factor Productivity and China's Miraculous Growth: An Empirical Analysis

43 Pages Posted: 20 Jun 2014

See all articles by Jianhua Zhang

Jianhua Zhang

The People’s Bank of China

Chunxia Jiang

University of Aberdeen; Middlesex University

Peng Wang

The People's Bank of China (PBC)

Date Written: June 1, 2014

Abstract

This paper examines the role of total factor productivity (TFP) in China’s miraculous growth during 1997-2012 and reports that 16% of the GDP growth is driven by the TFP growth, dominated by technological progress. The TFP growth varies significantly across regions and is positively influenced by human capital, innovations and import of machinery, and negatively affected by financial development and exports with little influence from FDI, infrastructure and market competition. It also reports tentative evidence for a weak spillover effect of FDI conditional on the level of financial development and a negative counteractive effect of import of machinery and human capital.

Keywords: TFP; Hyperbolic distance function; Stochastic Frontier Analysis; Growth; China

JEL Classification: D24; O11; O47

Suggested Citation

Zhang, Jianhua and Jiang, Chunxia and Wang, Peng, Total Factor Productivity and China's Miraculous Growth: An Empirical Analysis (June 1, 2014). Available at SSRN: https://ssrn.com/abstract=2456009 or http://dx.doi.org/10.2139/ssrn.2456009

Jianhua Zhang

The People’s Bank of China ( email )

China

Chunxia Jiang (Contact Author)

University of Aberdeen ( email )

Dunbar Street
Aberdeen, Scotland AB24 3QY
United Kingdom

Middlesex University ( email )

The Burroughs
London, NW4 4BT
United Kingdom

Peng Wang

The People's Bank of China (PBC) ( email )

China

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