Regional Economic Growth Of Total Factor Productivity Change Research

With economic development, total factor productivity growth has become the core of modern economic growth; it's an important sign of a nation or a region about economic growth quality, technological progress and management efficiency improvement. As an important performance index for the total economy, provincial total factor productivity can not only reflect the overall situation of economic growth of economic units, but also provide an important way to understand the regional disparities. This paper is going to answer the following questions by studying the regional total factor productivity changes since 1978, how about the current status of the total factor productivity and its growth? What regional difference existed about them? How much the TFP growth and its composition contributed to the regional economic growth? What kind of economic growth way was resulted by them? How the differences of TFP impact on the regional economic growth gap? What factors affected the regional differences of TFP growth?To answer these questions, After reviewing many literatures of the economic growth theory and the total factor productivity theory, based on the latest data, this article used the international popular research methods, examined the change characteristics of China's regional total factor productivity during 1978-2007. Specifically, we studied from the following four points:First, we used nonparametric DEA-Malmquist index estimated the TFP growth rate of the China's provinces, and decomposed them into production efficiency improvement and technological progress, examined the change situations of TFP growth and its composition, and analyzed the provinces' production efficiency; Then we used economic output decomposition, decomposed the provincial GDP per labor into three parts:factor inputs, human capital and TFP growth(efficiency improvement and technological progress), and analyzed their contribution to regional economic growth; Thirdly, based on the estimation of provincial TFP, we decomposed the regional disparities into two components:factor accumulation and total factor productivity differences by variance decomposition, examined the role of the TFP in the formation and expansion of the regional gap; Finally, based on the theoretical analysis of each factor, for exploring the deep reasons of the TFP growth and its regional differences, we tested human capital, foreign trade, marketization, urbanization, government spending, infrastructure, and several other related factors'influences on TFP growth. Through these researches, we draw the following conclusions:we estimate and decompose the provincial TFP growth by non-parametric Malmquist index method, the result shows that:China's production efficiency level showed an upward trend in 1978-1990, but declining after this; the average production efficiency of the east was greater than the Middle and the West. In addition, 30 years, the annual average TFP growth rate of our country was only 0.28%. By decomposition, we found that, efficiency improvement was the main source of China's TFP growth, but this situation was varied at different times:before 90's, TFP growth was mainly due to production efficiency improvement, but after that, it was mainly due to technological progress. Besides, the TFP growth rate of the East was greater than the Middle and the West, and productivity improvements were their main source of TFP growth, but relative to the west and the middle, the east showed a clear advantage of technological advances.The economic output decomposition shows that:physical capital accumulation, efficiency improvement, technological progress and human capital are all important source of economic growth, but the main source was capital accumulation which contribution was much higher than the other three. This shows that, China's economic growth pattern was the extensive economic growth pattern which mainly relyed on investment. Besides, the efficiency improvement is our second largest source of economic growth, but different in three regions.This paper simply decomposes influences of regional gap into two components: the first is factor accumulation, the other is the TFP. Using the method of growth accounting and variance decomposition, we estimated the provinces TFP under the two situations:considering the human capital or not, and decomposed the regional gap in the case of considering human capital. The result shows that:firstly, human capital is playing an increasingly important role in China's economic growth; Secondly, the differences of factor inputs is the main determinant of regional disparities, but its contribution has been declining since the 90s, while the role of TFP has been rising and is expected to become the main deciding factor of future regional disparities; In addition, the paper also find that the positive interaction of TFP and factor inputs have growing influence on regional disparities.Finally, based on the theoretical analysis of main factors, we tested human capital, foreign trade, marketization, urbanization level, government spending, infrastructure, and several other related factors' influence on TFP growth by Pooled EGLS. Through analysis, we draw the following conclusions:first, human capital was an important influencial factor on TFP growth. Second, the trade openness had a positive influence on TFP growth and productivity improvements, but no significant effect on technological progress. In addition, non-nationalization-marketization process, urbanization and good infrastructure were all had an important influence on TFP growth, productivity improvement and technological progress. However, the government spending's contribution to TFP growth was negative. Fourth, the development of service industries also had a positive effect on productivity improvement.