EFFICIENCY AND PRODUCTIVITY PERFORMANCE OF CHINESE MANUFACTURING REVISITED

Using a newly constructed data set for 24 manufacturing, mining and utility industries over the period 1952-2005, this study applies the Malmquist index approach to measure the productivity performance of China’s individual industries over different periods when China had significant policy regime shifts in the central planning and the reform periods. The adopted Malmquist index approach allows us to address several important industry level problems in measuring total factor productivity (TFP). Firstly, we measure the frontier shift and TFP change for each industry over the whole sample period and major sub-periods. Secondly, the calculated TFP growth for each industry is further decomposed into technical efficiency (TE) change (or catch up with the best-practiced industries which form the frontier) and technological progress (TP). Thirdly, TE is factored into two terms: one representing the pure efficiency change and the other representing scale efficiency change which is measured by comparing the CRS technical efficiency score with the VRS technical efficiency score. It shoul