A Non-Parameter Decomposition Framework that Better Estimates Contributors to China’s Economic Growth (1978-2010)*

Dong Minjie  and Liang Yongmei
China Credit Rating Co., Ltd, Beijing, China
Institute of Industrial Economics, Chinese Academy of Social Sciences, Beijing, China

 
Abstract: This paper has deduced a non-parameter analysis framework that can estimate the sources of economic growth based on provincial data as samples. Result of the estimate indicates that between 1978 and 2010, TFP, labor and capital contributed to China’s economic growth by 10.9%, 3.7% and 85.4% respectively. If the impact of global financial crisis is not taken into account, these figures should be 20.7%, 3.3% and 76.0%. Contribution of labor to economic growth is the smallest, below 8% for most of the years. Share of TFP contribution increased before the 1990s despite wild swings, exceeding 50% in 1992, followed by continuous decline until well below 10% after 2005. Share of capital contribution decreased before 1990s with wild swings and maintained an upward trend after 1992, approaching 90% after 2005.
Keywords: TFP contribution, output inefficiency, optimal output, data envelopment

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