Economic and productivity growth decomposition : An application to post-reform China

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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  • Kui-Wai Li
  • Tung Liu

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Original languageEnglish
Pages (from-to)366-373
Journal / PublicationEconomic Modelling
Issue number1-2
Publication statusPublished - Jan 2011


This paper examines and applies the theoretical foundation of the decomposition of economic and productivity growth to the thirty provinces in China's post-reform economy. The four attributes of economic growth are input growth, adjusted scale effect, technical progress, and efficiency growth. A stochastic frontier model with a translog production and incorporated with human capital is used to estimate the growth attributes in China. The empirical results show that input growth is the major contributor to economic growth and human capital is inadequate even though it has a positive and significant effect on growth. Technical progress is the main contributor to productivity growth and the scale effect has become important in recent years. The impact of technical inefficiency is statistical insignificant in the sample period. The relevant policy implication for a sustainable post-reform China economy is the need to promote human capital accumulation and improvement in technical efficiency. © 2010 Elsevier B.V.

Research Area(s)

  • China economy, Human capital, Returns to scale, Technical efficiency, Technical progress

Citation Format(s)