Exploring the Sources of Labor Productivity Growth and Convergence among State-Owned Forestry Enterprises in Northeast China

Abstract

AbstractThe state-owned forestry enterprises (SOFEs) are important producers of forest products in China, and their competitiveness depends largely on their labor productivity (LP). This article is the first to investigate the sources of LP growth and the convergence patterns of SOFEs in northeast China. Based on panel data from 87 SOFEs in northeast China from 2006 to 2018, this article has used the Cobb-Douglas production function to analyze the sources of LP growth, using three convergent methods to explore convergence patterns. The results show that there is a positive correlation between LP and an SOFE's ability to compete, and that both total factor productivity and capital-to-labor ratio significantly contribute to LP growth in all SOFEs of northeast China; however, the role of the quantity of labor was negative. On the whole, all SOFEs did not have σ-convergence in LP growth, but an absolute and a conditional β-convergence. Although the LP divergence between SOFEs in northeast China has not been narrowed, there has been a “catch-up effect” in LP growth. These results can help people understand the laws pertaining to LP growth among forest enterprises and also how they may reduce production costs, improving market competitiveness among forest products.