Growth in China 1978-2008 : Factor Accumulation, Factor Reallocation, and Improvements in Productivity
China's economic success over the past three decades can be decomposed into three broad contributions to growth; accumulation of labor and capital, growth induced by structural transformation (i.e. the reallocation of labor and capital across...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2011/05/20370815/growth-china-1978-2008-factor-accumulation-factor-reallocation-improvements-productivity http://hdl.handle.net/10986/20783 |
| Summary: | China's economic success over the
past three decades can be decomposed into three broad
contributions to growth; accumulation of labor and capital,
growth induced by structural transformation (i.e. the
reallocation of labor and capital across sectors and
ownership units), and growth in total factor productivity.
Understanding the evolution of these three growth
determinants is important for understanding China s future
growth potential. For example, in the neoclassical growth
model, rapid growth through factor accumulation eventually
slows with the onset of diminishing returns. And growth
achieved through the reallocation of factors of production
from less efficient to more efficient uses will also
eventually peter out as marginal products of factors are
equated across units. In this paper we perform a growth
accounting exercise for China which allows us to separate
these three broad contributions to growth. The main novelty
of our exercise lies in our efforts to understand the role
of reallocation of both capital and labor across major
sectors (agriculture, industry, and services), and across
ownership forms (state, collective, and other). |
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