The Analysis Of The Regional Disparity In Fujian Province Based On The Calculation Of TFP

Since Fujian Province is the principal part of the West Strait Economic Zone, thestudy on regional economic disparities of Fujian Province is meaningful with thereality of urgency and significance. Taking nine prefecture-level cities of FujianProvince (including its county-level cities subordinated) as the research object, thepaper makes positive analysis on the regional economic disparities of FujianProvince.Firstly, this paper measures the regional economic disparities among the nine citiesof Fujian Province by the coefficient of variation of gross domestic product (GDP)per worker. According to the curve of the coefficient of variation of GDP per worker,it describes the situation or the economic disparities of Fujian Province to make clearthat it is urgent to narrow the disparities.Secondly, based on the panel data from1982to2011, through the covariance test,this paper estimates the output elasticity of capital in Fujian Province by fixed effectmodel with unvaried technological progress parameters. And then, the papercalculates the total factor productivity (TFP) of the nine cities over the years bySolow’s residual method.Thirdly, based on the data of TFP, the paper decomposes the regional economicdisparities by variance decomposition to find out which is playing more importantrole in the regional economic disparities of Fujian Province. The result shows that:The contribution of the factor inputs to the regional disparities is further more thanthe contribution of the TFP, so the difference of factor inputs between the nine citiesis main determinant of regional disparities. Based on the result, the paperre-decomposes the factor input which encompasses physical and human capital byvariance decomposition to see which part of the factor input plays the most importantrole in the regional economic disparities of Fujian Province. The answer is that: thecontribution of physical capital to the regional disparities is further more than thecontribution of human capital. So the conclusion comes: The difference of physical capital inputs between the nine cities is dominant determinant of regional economicdisparities of Fujian Province. Relying on the conclusion, to continually narrow theregional economic disparities the government should strengthen the basic investmentin backward regions, which are Putian, Zhangzhou, Longyan, Nanping and Ningde.At last，the paper makes a summary of all the analyses，and discusses properpolicies to narrow the regional economic disparities of Fujian Province.