Analysis of Total Factor Productivity in the Chinese Manufacturing Sector: Focusing on Firm Ownership Types

This study reinvestigates Total Factor Productivity (TFP) growth in the Chinese manufacturing sector from 1999 to 2016 and estimates TFP growth in different ownership types over the period 2004 to 2011. First, this study employs the Malmquist index since it is possible to compare TFP growth among manufacturing sectors and identify the main source of TFP growth. The estimated results show that the average TFP growth among Chinese manufacturing industries is 6.4% per year, and technical progress is found to be the main source of TFP growth. The efficiency change in the Chinese manufacturing sector is poor due to research and development effects, and there is a significant disparity in terms of TFP growth among the 28 manufacturing industries in China. Second, although the estimated results show that TFP growth in all ownership types is positive, there is a significant disparity among different ownership types due to various causes. Overall, the findings from this study provide an optimistic expectation for the future development of the Chinese manufacturing sector based on technical progress, while Chinese manufacturing firms need to pay much attention to promoting their efficiency in the future.