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

Ding, S. and Guariglia, A. and Harris, R. (2016) 'The determinants of productivity in Chinese large and medium-sized industrial firms, 1998–2007.', Journal of productivity analysis., 45 (2). pp. 131-155.


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.

Item Type:Article
Keywords:TFP, Productivity decomposition, Entry, Exit, Reallocation of resources, China.
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Publisher statement:© The Author(s) 2015 Open Access This article is distributed under the terms of the Creative Commons Attribution 4.0 International License (, which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license, and indicate if changes were made.
Date accepted:17 October 2014
Date deposited:28 October 2015
Date of first online publication:24 October 2015
Date first made open access:No date available

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