Technological factors and total factor productivity in China: Evidence based on a panel threshold model

This study investigates the effects of technological factors, including indigenous research and development (R&D) investments, technology spillovers coming from foreign direct investments, export, and import, on China's total factor productivity (TFP). Using provincial panel data of China, covering 30 provinces over the period 2000–2014, our results confirm that indigenous R&D investments play a leading role in promoting TFP. Linear analysis suggests that, except for export, the technology spillovers through openness are beneficial for TFP growth. However, a further discussion based on a panel threshold model suggests that the different behaviours of these technology spillovers are dependent on the technological absorptive capacity affecting factors, such as human capital and indigenous R&D investments. The human capital will strengthen the spillover effects of each technology spillover. However, R&D intensity initially tends to hamper their spillover effects. Once the R&D intensity exceeds a certain level, the negative spillover effect of export on TFP tends to be alleviated, and the positive spillover effect of foreign direct investment and import on TFP will increase.     

Openness and total factor productivity in Swedish manufacturing, 1980–1995

Openness and Total Factor Productivity in Swedish Manufacturing, 1980–1995. — This paper studies the effect of openness on total factor productivity (TFP) growth. Using industry-level data for Swedish manufacturing from 1980 to 1995, the paper shows that integrated industries tend to be more engaged in R&D and have more entry and exit activity than other industries. The results show that domestic R&D intensity does not contribute to the TFP growth rate. Instead, openness to international markets, which helps facilitate technology spillovers, is an important factor. There is also some evidence that producers exiting the market are less productive, implying that such exits will increase the average productivity of the industry.     

Trade, technology spillovers, and food production in China

Trade, Technology Spillovers, and Food Production in China. — This paper studies technology spillovers between China and other countries, international trade in inputs being the prime carrier of knowledge in agricultural production. Human capital characteristics and structural characteristics of the agricultural production sys-tems determine the local usability of foreign knowledge for Chinese farmers. The authors utilize a multi-region applied general equilibrium model to analyze Chinese opportunities to benefit from foreign technology improvements in grain production. It is shown that possible negative welfare effects of unilateral trade liberalization of China against North American imports of agricultural inputs may be more than compensated by productivity gains if technology spillovers are included.     

How do Chinese industries benefit from FDI spillovers?

Recently, Foreign Invested Enterprises (FIEs) in China have increased their investment in not only production activity but also R&D activity. This paper examines the impact of spillovers from such activities by FIEs on two types of innovations by Chinese domestic firms: Total Factor Productivity (TFP) and invention patent application, using comprehensive industry and province-level data. We evaluate such spillovers according to FIEs' ownership structure, the origin of foreign funds and whether they are from the same industry or from other industries. We find an interesting asymmetry between spillovers to TFP and invention patent applications; while we do not find significant intra-industry spillovers from FIEs but find robust inter-industries spillover related to TFP, we find substantial intra-industry spillovers promoting invention patent applications but no evidence of inter-industries spillovers. Furthermore, whereas spillovers from FIEs to Chinese firms' TFP stem from their production activities, the source of spillovers related to invention patent applications is mostly through their R&D activity. Our findings indicate a need for multidimensional evaluation of the role of FDI in developing countries.     

Knowledge economy and industry performance in China: a provincial level analysis

ABSTRACT

We construct a framework for investigating the effects of knowledge on industry performance. Using Chinese provincial industry data from 2000 to 2012, we decompose total factor productivity (TFP) change into the four components of embodied technical change, disembodied technical change, scale efficiency change, and technical efficiency change. Our results show a considerably stronger positive effect of advanced knowledge on production technology than of basic knowledge. International knowledge spillovers, particularly trade-induced spillovers, are more effective in inducing TFP growth than domestic spillovers. Our analysis further illustrates a discrepancy in TFP growth rates between regions, and we find TFP of the Central and West Region to be catching-up with the East Region. On average, scale efficiency change is the major contributing factor to regional disparities in TFP change. We discuss several policy implications of our results.

Abbreviation: Advanced knowledge (ADV); Share of agriculture (AGR); Basic knowledge (BAS); Chinese Industrial Census (CIC); Data envelopment analysis (DEA); Disembodied technical change (DTC); Embodied technical change (ETC); Foreign direct investment (FDI); Gross domestic product (GDP); Population density (POD); Scale efficiency change (SEC); Stochastic frontier analysis (SFA); International spillovers from foreign countries (SPF); Cross-sectoral external knowledge spillovers within China (SPH); Neutral technical change (TC); Technical efficiency (TE); Technical efficiency change (TEC); Total factor productivity (TFP); International trade (TRD); Degree of urbanization (URB)     

Technology transfer on a two-way street: R&D spillovers through intermediate input usage and supply

Intermediate input usage is known to channel R&D spillovers across countries and industries. This paper highlights that technology also diffuses across countries and industries through intermediate input supply. Technology transfer to intermediates suppliers ensues from R&D that induces a demand for technologically advanced intermediates. I analyze R&D spillovers through intermediate input usage and supply for 18 manufacturing industries in 20 OECD countries over 1987–2009. Results support both use- and supply-driven R&D spillovers. Comparing their effects reveals interesting variations. Among domestic industries, intermediate input supply is the dominant channel. For international relations, both use- and supply-driven R&D spillovers are found.     

China's post-economic reform growth: The role of FDI and productivity progress

China has become the top FDI destination among all developing countries and remained host to the world's largest share of foreign direct investment receipts since its accession to the WTO in 2001. Given the impressive growth performance and FDI influx into China, the two globalized delta economies (GDEs), Pearl River Delta (PRD) and Yangtze River Delta (YRD), have continued to out-perform all other regions in China in terms of FDI absorption and growth. The role that inward FDI plays in the process of regional development and the exact channels through which economic growth would be affected are investigated by panel data estimations of the GDEs at the city level since China's economic opening and reform. This research shows consistent results with some recent findings in other developing countries in that FDI exerted spillover effects and affected productivity (TFP) growth of the recipients. While TFP was found to be increasing overtime in the GDEs cities and facilitated economic growth in both PRD/YRD regions, major technology- and knowledge-related factors including R&D and human capital other than FDI also played critical roles in TFP enhancement and regional growth. The endogeneity of TFP and the simultaneous relations of FDI in affecting TFP and output growth are also addressed in this regard.     

International R&;D Spillovers Revisited

Using newly constructed panel data from seventeen OECD countries during 1971–2000, this paper examines the effect of international R&D spillovers via intermediate goods imports on a country’s productivity. Estimation models are built on the model of Coe and Helpman (1995). They are tested and estimated using improved econometric techniques for panel cointegration test and estimation. Estimation results confirm the robust positive effect of international R&D spillovers through the channel of intermediate goods imports. This contradicts recent skepticism about the results of Coe and Helpman (1995) that has been raised with the development of panel data econometrics.     

FDI productivity spillovers and the technology gap in Malaysia's electrical and electronic industries

This study measures the impact of indirect technology transfer through spillovers from foreign direct investment (FDI) on Malaysia's development of a ‘high‐tech’ sector, namely the electrical and electronic (E&E) industries. We estimate the total factor productivity (TFP) of establishments as a function of foreign presence within and across industries. Both the fixed assets and wages share of foreign establishments in a five‐digit ISIC (International Standard Industrial Classification) industry are used as measures of foreign presence. The estimations provide evidence of significantly negative (or insignificant) FDI vertical spillover effects and insignificant horizontal spillover effects on the TFP of domestic establishments. The positive (negative) coefficient of the interaction term between the forward (horizontal) spillover variable and the technology gap supports the ‘catching‐up’ (technology accumulation) hypothesis. The negative impact, even absence, of FDI spillover effects on TFP and the mixed evidence on the effects of interactions between FDI spillovers and the technology gap suggest that fine‐tuning of fiscal incentive schemes for FDI to arrive at positive net benefits may prove to be a daunting task in the Malaysian E&E industries.     

反向技术溢出、技术进步和我国经济增长——基于面板协整模型的分析

本文选取了1990～2007年间中国进口和对中国FDI前十位的国家和地区,扩展了CH模型,建立了包含进口和FDI两个物化型技术溢出指标的面板模型,利用面板单位根和协整技术,得到随机效应模型,分析溢出国对华出口和FDI对溢出国的反向技术溢出效应,结果表明:从溢出国角度看,对外投资比对外贸易更有利于这些国家和地区全要素生产率的提高,因此,溢出国更倾向于对华FDI,我国招商引资政策需要做出调整。     

Call For Papers: The Eighth International Convention of the East Asian Economic Association

This paper provides empirical estimates of total factor productivity (TFP) trends in a sample of 17 APEC countries over the period 1975 to 1996. TFP growth is an important measure of an economy's performance and if measured correctly it can provide valuable guidance on issues related to the assessment of sustainable growth trends. We use the Malmquist index to measure TFP growth and decompose it into an efficiency change and a technical change component. This decomposition provides extra insight on assessing sustainable growth trends. The measurement technique itself is regarded as a significant improvement over previous conventional measures of TFP growth. The results are very interesting. Japan, Thailand and primarily Indonesia and Malaysia are identified as countries exhibiting on average negative TFP growth rates in the 1975-1990 period. In all these countries as well as in South Korea and Taiwan the main cause of low TFP growth is a poor (negative) efficiency record. The average TFP growth rate for Japan and Malaysia is positive in the 1975-1996 period but the efficiency change component remains negative. In all these countries the main contributor to labour productivity growth is capital accumulation. Unlike previous studies we find no evidence of a poor TFP growth performance for Singapore. Furthermore, we estimate that most of Singapore's labour productivity growth is driven by efficiency change. Estimates of rates of convergence towards the frontier economy that is estimated (not assumed as in other studies) to be the US, are also reported.     

National and international spillovers from R&D: Comparing a neoclassical and an endogenous growth approach

National and International Spillovers from R&;D: Comparing a Neoclassical and an Endogenous Growth Approach.— Two models where productivity growth is caused by spillovers from R&;D are analyzed using a sample of nine manufacturing industries in six large OECD countries between 1979 and 1991. The first model is based on traditional productivity analysis, the second model on the endogenous growth theory. The empirical results indicate stronger support for the latter. The results suggest that spillovers from R&;D exist within industries, both nationally and internationally, confined to industries that are relatively R&;D-intensive. There is, however, little evidence of spillovers between industries. Finally, FDIs seem to facilitate the diffusion of R&;D results, but the authors do not find any effect on growth from R&;D embodied in intermediate products. JEL no. O32, O40     

Total Factor Productivity Convergence in Developing Countries: Role of Technology Diffusion

In recent years, though total factor productivity (TFP) convergence phenomenon has gained tremendous importance yet further deliberations for identification of catalytic factors that can help developing countries to achieve their steady developmental paths, are under way. Against this backdrop, present study investigates the principal determinants of TFP convergence by employing data of 91 developing countries over the period 1960–2015 and with USA being the frontier country. In concordance with the existing literature, main focus remains on technology diffusion for the catch‐up process and is measured by means of trade openness (TO) and foreign direct investment (FDI) with introduction of their interaction terms. However, TFP is computed by incorporating the Growth Accounting Model while empirical results are drawn from the 2‐step GMM estimation technique. It is surfaced that though high degree of openness benefits TFP growth and convergence but FDI has a dominating role. Therefore, governments can play a competent role via unflagging efforts in ensuring that the right kind of policies are enacted, promoting trading activities and FDI flows.     

地方财政支出对全要素生产率的空间溢出效应分析———基于空间面板 Durbin 模型

我国各地经济发展水平、产业结构以及劳动力市场特征不同,使得地方财政支出的结构和重点也有差异,但地区间财政支出的空间溢出效应对经济增长的影响不容忽视。本文选取中国31个省市2006年-2011年的面板数据,采用空间面板Durbin模型,从地理权重和经济权重两个方面研究地方财政支出对周边地区全要素生产率及其分解项的空间溢出效应。结果表明,预算内财政支出对周围省市具有正向外溢性;预算外财政支出对周围地区的技术效率变化具有负向外溢性。     

人力资本对我国对外直接投资逆向技术溢出效应的影响——基于省际面板数据的非线性门槛回归技术

本文使用中国30个省份2003-2008年的面板数据,研究了不同人力资本水平下对外直接投资的逆向技术溢出对各地区全要素生产率的影响。实证结果说明:它们之间存在显著的人力资本双门槛效应。只有在人力资本跨越了10.5038这一门槛时对外直接投资逆向技术溢出效应才显著存在,未跨越这一门槛值的省份,人力资本对对外直接投资逆向技术溢出效应的吸收有负面影响;而人力资本跨越50.4804的少数省份,对外直接投资渠道的逆向技术溢出对全要素生产率的正面影响略低。     

Innovation, international R&D spillovers and the sectoral heterogeneity of knowledge flows

We analyze the relative effects of national and international, intrasectoral and intersectoral R&D spillovers on innovative activity in six large, industrialized countries over the period 1980–2000. We use patent applications at the European Patent Office to measure innovation and their citations to trace knowledge flows within and across 135 narrowly defined technological fields. Using panel cointegration we show that intersectoral spillovers have a key impact on innovation activities and that domestic R&D has a stronger effect than international R&D. However, within technological fields, estimated international R&D spillovers are 2.4 times the national R&D effects. We find significant differences across chemicals, electronics and machinery industries.     

Transactional activities and total factor productivity growth in Taiwan

Total factor productivity (TFP) growth shows how rapidly an economy is enhancing technology and the efficiency with which it allocates resources. It has been argued that “miraculous” growth in East Asian economies may not be sustainable, due to relatively low rates of TFP growth. Among these economies, it appears that Taiwan has indeed exhibited substantial technological progress. Failure to control for transactional activities, however, can distort the impression of TFP growth. This study recalculates Taiwan's TFP growth for the 1957–1993 sample period, adjusting for transaction costs in the government and private sectors. For the early years of the sample, 1957–1973, the economy's technological progress is better than GDP-based calculations suggest. In recent years, 1983–1993, productivity improvement has been overstated, but the economy has still exhibited relatively fast TFP growth.     

SOURCES OF PRODUCTIVITY GAINS FROM FDI IN INDONESIA: IS IT EFFICIENCY IMPROVEMENT OR TECHNOLOGICAL PROGRESS?

This article investigates the spillover effects of foreign direct investment (FDI) on productivity growth in the Indonesian food-processing (ISIC 311) and electrical machinery industries (ISIC 383). Total factor productivity (TFP) growth is decomposed into efficiency change and technological change by using the Malmquist productivity index. The empirical results show that efficiency improvement is the major driver of TFP growth in the food-processing industry, whereas technological progress is the dominant contributor in the electrical machinery industry. There are positive spillovers on efficiency change but negative spillovers on technological change in the food-processing industry. However, FDI spillovers turn out to be negative in efficiency change while positive in technological progress in the electrical machinery industry. These findings demonstrate that different industries experience different sources of productivity gains, which are dependent on the characteristics of firms in the industry.     

The Effects of Regional Economic Communities on Industrialization: The Case of COMESA

This paper seeks to establish the contribution of the Common Market for Eastern and Southern Africa (COMESA) programmes in promoting industrialization. It further seeks to establish the link between industrialization and productivity. The paper uses a gravity model to estimate a cross‐sectional time‐series (panel) dataset for the period 2001–2015. The results indicate that membership to COMESA has created large markets and promoted industrialization among member states. However, results also confirm that COMESA member states still heavily trade in industrial intermediates with non‐members. The study further reveals that the share of foreign total factor productivity (TFP) to COMESA's TFP are weaker than expected, which suggests non‐convergence to international knowledge spillovers. The study concludes that COMESA programmes have positively affected industrialization. We therefore recommend that COMESA should continue implementing strategies, policies and programmes that promote industrialization and technology transfer.     

Effects of knowledge capital on total factor productivity in China: A spatial econometric perspective

The transformation of China into a knowledge based economy is one of the most intensively debated research issues in Economic Geography. The focus of this study is on effects of knowledge capital on manufacturing total factor productivity (TFP) in China through the lens of the regional knowledge capital model (KCM). The objective is to estimate the impact of region-internal and region-external knowledge capital — measured in terms of patents granted by the Chinese patent office — on TFP across Chinese regions. We derive a Spatial Durbin Model (SDM) for empirical testing, using panel data on 29 Chinese regions for the years 1988–2007. The results indeed point to a shift of Chinese productivity growth to a more knowledge based one, statistically confirming the impact of knowledge capital on regional TFP after 1998. Furthermore, this shift is not only based on region-internal knowledge capital, but also on inter-regional knowledge spillovers.