The Impact Of Macroeconomic Policies On Manufacturing Productivity

In recent years, the TFP of China’s manufacturing industry growth rapidly, but the significant differences in productivity is an indisputable fact. From macro perspective, the implementation of monetary and fiscal policy has an important impact on productivity. So, the study of how monetary and fiscal policy affects productivity will help our government improve policies targeted and promote productivity levels.Based on this, we choose ACF method to estimate the TFP of manufacturing enterprises, and then weight to industry level. Then, we analysis how monetary and fiscal policy effect the productivity of the manufacturing sector from the view of financial constraints. In order to validate our hypothesis, we build econometric models, empirical analysis results are as follows:monetary policy can alleviate enterprises’financial constraints, and enhance the level of productivity of the manufacturing sector; but unlike monetary policy, due to the fiscal decentralization, cyclical fiscal policy is different in regions, this will impact productivity, we find that counter-cyclical fiscal policy will help alleviate financial constraints, but also lead to excessive investment and curb productivity gains, that is, industries with higher financial constraints tend to have less total factor productivity in regions with counter-cyclical policies.Overall, the contribution of this paper is mainly reflected in the research methods and perspectives. In the aspect of research methods, we use the latest ACF method to measure total factor productivity and then weight it to industry level. In the research perspective, we first focus on the relationship between monetary policy and TFP, analysis the mechanism of monetary policy affect TFP from the perspective of financial constraints, which makes up the blank of existing literature in this area. Secondly, we are concerned about fiscal policies in the context of decentralization. Although some scholars have proved that fiscal policy can effect a country’s total factor productivity, but their studies are only limited to the national level, and the analysis is not in-depth. Moreover, they ignored that cyclical fiscal policy will be different under the fiscal decentralization. So we pushed previous studies, combined with provinces and industry characteristics, and use the micro-level data to study the effect of region differences in cyclical fiscal policy on TFP from the perspective of financing constraints.