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 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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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2011-05-17
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| Subjects: | labor productivity, capital accumulation, total factor productivity, GROWTH THEORY, |
| Online Access: | http://documents.worldbank.org/curated/en/2011/05/20370815/growth-china-1978-2008-factor-accumulation-factor-reallocation-improvements-productivity https://hdl.handle.net/10986/20783 |
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