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Can China Escape the Middle-Income Trap ? : Productivity Catch-Up in China ’ s Manufacturing Sector
| Content Provider | Semantic Scholar |
|---|---|
| Author | Deng, Paul Tiange |
| Copyright Year | 2014 |
| Abstract | China’s gap in industrial labor productivity with the United States has been steadily shrinking over recent decades. In this paper we examine the main sources of gap reduction and the potential for further catch-up. Using Chinese above-scale firm-level data during 1998-2007 period and BEA industry -level data in the US, we first document the respective rates of growth of labor productivity, gap reduction, and contributions to overall catch-up of China’s manufacturing sector during 1998-2007. We then aggregate the firm-level data to the 3-digit industry level to estimate a productivity gap reduction function and find that the key drivers for the productivity convergence are the initial technology gap, increased R&D spending, firm’s ownership restructuring, and industry level entry-exit ratio, a measure of competitive dynamism. A key finding is that the catch-up dynamic entails the break out of a small number of firms within each industry rather than catch-up of lagging firms. We then use these finding to investigate on-going patterns of catch-up during 2007 to 2011. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.aeaweb.org/conference/2015/retrieve.php?pdfid=1233 |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
