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ICC Advance Access originally published online on July 3, 2008
Industrial and Corporate Change 2008 17(4):841-874; doi:10.1093/icc/dtn020
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© The Author 2008. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved.

This article appears in the following Industrial and Corporate Change issue: Special Issue: Schumpeterian Themes on Industrial Evolution, Structural Change and their Microfoundations [View the issue table of contents]

Productivity growth and structural change in Chinese manufacturing, 1980–2002

Lili Wang and Adam Szirmai

Correspondence: Lili Wang, Eindhoven Centre for Innovation Studies/UNU-MERIT, Keizer Karelplein 19, 6211 TC, Maastricht, The Netherlands. e-mail: wang{at}merit.unu.edu

Correspondence: Adam Szirmai, UNU-MERIT, The netherlands. e-mail: szirmai{at}merit.unu.edu

This article focuses on the contribution of structural change to aggregate manufacturing and industrial productivity in China. Using shift-share techniques, this article examines three types of structural change: changes in the sectoral structure of production, changes in the ownership structure, and changes in the regional structure of production. Overall productivity growth was slow in the 1980s, but accelerated dramatically from 1990 onwards. In 1980s, we found evidence of a structural change bonus, with sectoral shifts contributing 24% to overall productivity growth. However, when productivity growth accelerated in the 1990s, the contribution of the shift effect dropped to a mere 3.3%. In contrast to sectoral changes, changes in the ownership structure in the early 1980s contributed negatively to overall productivity growth. The contributions of ownership change turned positive after 1985, reaching 23% of productivity growth in the period 1992–1997. Shifts in ownership explain a substantial part of productivity growth during the productivity boom. Like shifts in ownership, regional shifts initially contributed negatively to productivity growth till 1992, and positively thereafter. However, the general contribution of regional shifts is lower than the contributions of sectoral and ownership shifts. Contrary to initial expectations, the regional analysis of productivity trends does not indicate regional divergence.


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