Luhang Wang (Xiamen University) - Productivity Growth in China’s Manufacturing Sector: 1998-2013

BOFIT Seminar - Luhang Wang (Xiamen University) - Productivity Growth in China’s Manufacturing Sector: 1998-2013

Co-authors: Loren Brandt (University of Toronto), Johannes Van Biesebroeck (KU Leuven and CEPR) and Yifan Zhang (Chinese University of Hong Kong)

Abstract:
China’s manufacturing sector has been a key source of the economy’s dynamism. Analysis after 2007 however is severely limited by problems in the key data source for empirical analysis, the NBS’s annual survey of industrial firms. Issues include missing information on value-added and intermediate inputs, and concerns of over-reporting. The annual survey of firms conducted by China’s State Taxation Administration (STA) provides an alternative source of firm-level data, including information on value-added and intermediates, for years from 2007 to 2013. Since the sample is not representative and the precise sampling scheme is not known, the data cannot be used directly to draw inferences on China’s manufacturing sector. By comparing the joint distribution of key variables for which both surveys provide reasonably reliable information, we recover the sampling scheme of the STA survey and use it to simulate samples for 2007 to 2013 that are comparable to the NBS sample in early years. Our estimates reveal a marked slowdown in revenue-based total factor productivity growth that affects all sectors, ownership types, and regions. The reduced contribution of firm entry to aggregate productivity growth is especially prominent. 

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