Provincial Productivity in China: Accounting for Environmental Factors (1999-2005)

Abstract: One of the most serious consequences of China's rapid economic development has been increased pollution and degradation of natural resources. The purpose of this study is among the first attempts to measure and analyze the impact of environment pollution on production in China by means of applied productivity analysis. We investigate technical progress and technical efficiency differences across Chinese regional economies using Malmquist-Luenberger productivity indexes and re-evaluate productivity performance at provincial level taking environmental factors into account. We expect that our findings will help provide theoretically well-founded estimates of green national accounts, determine the nature of China’s productivity growth, and contribute to the knowledge of sustainable economic growth and environment-friendly development in a broad sense