Empirical Study On The Growth And Efficiency Of China's Township-village Enterprises

Over the past 30 years of reform and opening-up, China has gained a rapid growth in rural economy and even the whole national economy, the success of which achieved substantially benefited from the process of rural industrialization with Chinese characteristics, and the key role played in this process of rural industrialization is the rise and development of township-village enterprises (TVEs). Owing to a series of special macro-environmental factors and their own micro-organization advantages, the township-village enterprises have grown out of nothing and developed rapidly, and made an indelible contribution on increasing countrymen's incomes, transferring surplus labors, adjusting structure of rural economy and earning foreign exchange through export, and accelerating the process of industrialization and urbanization. However, with the establishment and perfection of China's socialism market economy system, the entire society economy development is transferring to the intension direction of urban-rural coordinated development, resource thrift, environment-friendly, and efficiency improvement. In the face of such tremendous pressures like the strengthen market restraint, shortage of resources and intensified competition, the township-village enterprises which "originated from rural areas and were born out of agriculture" are showing more and more inability to adapt to the technology, structure, and system as the day goes by and start to entering a developing stage of factor reorganization, structure optimization, and reformation assault. To explore the existing problems in the development of township-village enterprises in China, probe the constraints in their growth and to seek their source of efficiency enhancements under new situations are undoubtedly of great theoretical values and practical significances.Total Factor Productivity (TFP) reflects that production units transfer the input into convention efficiency of the output in the input-output process. It is the epitome of the intensive growth mode and a relatively ideal analytical framework that can reflect comprehensively the contributions of factors besides the traditional production factor input to the growth of output. From the perspective of the growth source, the output growth for the township-village enterprises is the combined effect made by the factor input growth and factor productivity improvement, and the total factor productivity improvement may also be attributed itself further to the improvement of the technical efficiency and technological progress etc. which contain different policy implications in the empirical framework of production frontier approach. Based on the practical demand, this dissertation, in the framework grounding on the total factor productivity and production frontier approach, combines the theory analysis with empirical analysis and the macro analysis with micro analysis, makes an all-around study of the growth and efficiency of China's township-village enterprises which include the gross growth and source, the regional disparity and root, changes and its components of productivity, and the macro and micro acting factors for TVEs etc. The contents and conclusions are as follows.(1) The common characteristics of growth of township-village enterprises in the transformation period. Firstly, on the base of summarizing the development course, the historical contribution as well as the related theory of economic growth, chapters 2, 3 and 4, seek out the sources of motive force for output growth in China's township-village enterprises, and then makes a basic judgment of the growth type of township-village enterprises using the framework of Solow's Growth Accounting. Secondly, this dissertation uses the variance decomposition method to assess the contribution of the factor input increase and the variation of the total factor productivity to the disparities of output across provincial township-village enterprises. The research shows that from the perspective of contribution of each growth factor, the contribution of total factor inputs to the growth of township-village enterprises reaches nearly 70%, while the contribution of the TFP growth is relatively small, therefore the driving force for the output growth of the township-village enterprises mainly rooted in the increase of factor input, from which we may conclude that the township-village enterprises show a degree of extensive operating characteristic as a whole. Viewed the result of variance analysis, the growth of township-village enterprises in the whole transition period has showed clear regional imbalance, and since the mid-1980s, the disparities between the three regions of east, middle, and west have surpass the intra-area disparities, meanwhile the provincial total factor productivity growth disparities are the most important factor that causes the regional disparities.(2) The total factor productivity growth and its elaborate decomposition in township-village enterprises. Drawing support from the non-neutral technological progress stochastic frontier production function model in the technology inefficiency, chapter 5 researches the vicissitudes of the TFP growth between 29 provincial township-village enterprises since the 1990s, and breaks into technological progress, technical efficiency change, allocative efficiency and scale efficiency which is the strictest decomposition so far. The conclusions achieved are as follows: In the early 1990s the rapid growth in TVEs' output depended on the comparative advantages of abundant labor forces in China's rural areas, and the total factor productivity maintained relatively speedy growth; in the early twentieth century, the capital output elasticity was more and more close to and even exceeded to the labor output elasticity, which led to the appearance of "capital crowds out labor", and the total factor productivity has transferred into slow-speed, steady growth. In the four main component factors, the township-village enterprises, because of technological progress, technical efficiency change, allocative efficiency and scale efficiency, enabled the total factor productivity to increase 3.68, 1.95, 1.14 and 1.62 percentage points per year with technological progress as TFP growth's principal driving force.(3) The dynamic changes and the source of the total factor productivity in township-village enterprises. Using Malmquist productivity index based on the DEA method, chapter 6 empirically analyzes the dynamic changes and source of the total factor productivity in China's 29 provincial township-village enterprises, and verifies with the empirical result of Stochastic Frontier production Function. The dissertation draws the following conclusions: From the time change pattern, the total factor productivity growth in our township-village enterprises showed a distinct stage characteristic, with 10.71% growth rate per year in the period of 1990-1995 and technological progress as the principal driving force; in the period of 1996-2001, under the influence of the technological progress index changes, the township-village enterprises' TFP growth dropped in momentum, and fluctuated repeatedly in each year; in the period of 2002-2005, the total factor productivity in township-village enterprises was declined, moreover, technological progress reduction coexisted with the technical efficiency loss. From the space change pattern, the provincial discrepancies in the township-village enterprises' TFP growth were obvious, and different TFP growths have taken place (in order, were east, west, and middle from high growth to low one), however the main reasons for the discrepancies were different. The technical efficiency index of township-village enterprises in eastern provinces were negative and the growth of TFP mainly relied on the technological progress; while the township-village enterprises in the middle and western provinces have been maintaining the technological progress, their technical efficiencies were improved effectively. The difference was that the TFP growths of township-village enterprises in the middle provinces were chiefly contributed by the technological progress while in the eastern provinces the technical efficiency improvement played the main role.(4) The influential factor analysis of township-village enterprises' TFP growth and technical efficiency improvement. Firstly, basing on the measurements and calculations of the township-village enterprises' TFP growth and its components, chapters 6 and 7 make a further research on the influences of factors such as the rural human capital, the structure of property rights, FDI proportion, dependent ratio of China's trade, relative scale of township-village enterprises and urbanization process on the township-village enterprises' TFP growth, technological progress and technical efficiency improvement. And then grounding on the micro township-village enterprises data from the year of 2001 to 2005 in Hubei province, this dissertation employs Battese & Coelli's (1995) B-C model and introduces the variables like legal status, economic environments, traffic situations and operating years in the technical non-efficiency equation so as to using one step evaluation method to discuss the influence of exogenous factors on the technical efficiency. The above named method is an important innovation to the former traditional two steps evaluation method. The whole conclusions of influence factors analysis are basically in line with the anticipations of economic theory, which provides an efficient policy tool for seeking after the sources of the township-village enterprises' productivity growth and technical efficiency enhancements.(5) Countermeasures and proposals of promoting efficiency and realizing the sustainable development of the township-village enterprises. Basing on the above research conclusions, the eighth chapter of this dissertation puts forwards several policy proposals for improving the total factor productivity of the township-village enterprises in China: the first one is to deepen the property right reform in the township-village enterprises and to perfect corporate governance structure; the second one is to establish effective technological innovation mechanism and to improve stochastic technological progress level; the third one is to perfect various kinds of institutional construction and to remove the inefficiency factors; the forth one is to rationally determine the scales of the township-village enterprises and to accelerate the overall development of the township-village enterprises; the fifth one is to enlarge the rural human capital input and to enhance the qualities of laborers in the township-village enterprises.