Total factor productivity growth and its decomposition in the Chinese construction industry since China's accession to the World Trade Organization
Engineering, Construction and Architectural Management
ISSN: 0969-9988
Article publication date: 13 April 2021
Issue publication date: 24 March 2022
Abstract
Purpose
Since China's accession of the World Trade Organization (WTO), its construction industry has attained unprecedented growth. However, for the sources of this enormous growth, a controversy regarding the total factor productivity growth (TFPG) still remains in production practice and extant studies. In view of this, the purpose of this paper is to measure TFPG and to explore its sources in the industry post-WTO accession.
Design/methodology/approach
This study presents an innovative source analysis of TFPG. Stochastic frontier approach is adopted to measure TFPG and to explore its sources by decomposing TFPG into technical progress (TP), technical efficiency change (TEC), allocative efficiency change (AEC) and scale efficiency change (SEC). Although China joined WTO in 2001, to provide an effective baseline, the study period is from 2000 to 2017.
Findings
The empirical results reveal that TFPG presented an overall downward evolutionary trend, but it still maintained a high growth post-WTO accession. From the perspective of decomposition, TP was the main source of TFPG. Furthermore, as a neglected source, interaction effects among TP, TEC, AEC and SEC have been demonstrated to have a significant influence on the cumulative TFPG.
Practical implications
To make the results be reliable, the authors discuss the empirical findings mainly by revealing the reasons behind the evolutions of TFPG and its sources. Based on these revealed reasons, government and policy makers can further refine and summarize some more detailed and targeted policy implications to improve TFPG.
Originality/value
By providing many empirical evidences to solve the aforesaid TFPG controversy, this paper, therefore, enriches the body of knowledge on growth theories, especially at the level of industrial economics.
Keywords
Acknowledgements
The funding of this study from the National Natural Science Foundation of China (No. 71972020), Social Science Planning Project of Chongqing, China (No. 2018ZD04), and Innovation Foundation of Inner Mongolia University of Science and Technology (NBS, 2019 QDW-S08) is acknowledged. Additionally, the authors express their deep appreciation to anonymous referees and the Editorial Office for their insightful comments.Conflicts of interest: The authors declare no conflict of interest.
Citation
Wang, Y., Ye, G., Zheng, C. and Zhang, S. (2022), "Total factor productivity growth and its decomposition in the Chinese construction industry since China's accession to the World Trade Organization", Engineering, Construction and Architectural Management, Vol. 29 No. 3, pp. 1258-1283. https://doi.org/10.1108/ECAM-09-2020-0741
Publisher
:Emerald Publishing Limited
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