Title
Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing
Document Type
Journal article
Source Publication
Journal of Development Economics
Publication Date
3-1-2012
Volume
97
Issue
2
First Page
339
Last Page
351
Publisher
Elsevier BV
Keywords
TFP, Industrial development, Reallocation, Entry, Exit, China
Abstract
We present the first comprehensive set of firm-level total factor productivity (TFP) estimates for China's manufacturing sector that spans China's entry into the WTO. For our preferred estimate, which adjusts for a number of potential sources of measurement error and bias, the weighted average annual productivity growth for incumbents is 2.85% for a gross output production function and 7.96% for a value added production function over the period 1998–2007. This is among the highest compared to other countries. Productivity growth at the industry level is even higher, reflecting the dynamic force of creative destruction. Over the entire period, net entry accounts for over two thirds of total TFP growth. In contrast to earlier studies looking at total non-agriculture including services, we find that TFP growth dominates input accumulation as a source of output growth.
DOI
10.1016/j.jdeveco.2011.02.002
Print ISSN
03043878
E-ISSN
18726089
Publisher Statement
Copyright © 2011 Elsevier B.V.
Access to external full text or publisher's version may require subscription.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Brandt, L., Biesebroeck, J. V., & Zhang, Y. (2012). Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing. Journal of Development Economics, 97(2), 339-351. doi: 10.1016/j.jdeveco.2011.02.002
