Ownership reform and total factor productivity growth in Chinese industry

Abstract

This paper contributes to the literature on total factor productivity (TFP) in Chinese industry. First, an adjusted TFP index is calculated through deflating raw data on TFP in Chinese industry using indexes on technological innovation in Japan and the United States. Second, the TFP index is regessed on the percentage of gross industrial output produced by non-state firms for the period 1980 to 1995. The results suggest that ownership reform was an important determinant of growth in industrial TFP over the period.