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Structural breaks, rural transformation and total factor productivity growth in China

Structural breaks, rural transformation and total factor productivity growth in China

You, Kefei ORCID: 0000-0001-7253-5838 and Sarantis, Nicholas (2012) Structural breaks, rural transformation and total factor productivity growth in China. Journal of Productivity Analysis, 39 (3). pp. 231-242. ISSN 0895-562X (Print), 1573-0441 (Online) (doi:https://doi.org/10.1007/s11123-012-0285-z)

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Abstract

This paper carries out an empirical investigation into the contribution of rural transformation, which can produce efficiency gains over and above those associated with technical progress, to total factor productivity in China during the post-reform period 1980–2010. For the first time for China, the roles of rural transformation and technical progress are examined whilst structural breaks are taken into account. We employ Bai and Perron (Econometrica 66:47–68, 1998; J Appl Econom 18:1–22, 2003a; Econom J 6:72–78, 2003b) methods which allow for multiple structural breaks at unknown dates and can be applied for both pure and partial structural changes. We also evaluate the robustness of our results by employing alternative production functions and two capital series. Two structural breaks near the Tiananmen Square incident in 1989 and the implementation of further reforms and opening-up measures in 1995 were identified for both capital series. We found the contribution of rural transformation to total factor productivity to be significant and positive across all regimes. However, its importance to the growth of total factor productivity has been declining over time, while that of technical progress has been increasing.

Item Type: Article
Uncontrolled Keywords: China; Rural transformation; Structural breaks; Total factor productivity
Subjects: H Social Sciences > HD Industries. Land use. Labor
Faculty / Department / Research Group: Faculty of Business
Faculty of Business > Department of Accounting & Finance
Last Modified: 27 Feb 2019 16:01
Selected for GREAT 2016: None
Selected for GREAT 2017: None
Selected for GREAT 2018: None
Selected for GREAT 2019: None
URI: http://gala.gre.ac.uk/id/eprint/16264

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