Industrial Chain Correlation and Total Factor Productivity

Abstract

As a matter of fact, the total factor productivity, as a crucial metric for measuring the speed and quality of output in enterprises, plays a vital role in optimizing resource allocation and fostering the synergistic development of industries especially in recent years. With this in mind, this paper studies and investigates how the degree of industrial chain correlation affects the total factor productivity. By using the methods of benchmark regression analysis, robustness test, heterogeneity analysis and quantile regression, the empirical findings indicate that the impact of industrial chain connectivity on enterprise total factor productivity follows a "U"-shaped distribution and remains robust. Furthermore, its influence varies among enterprises with different ownership structures as well as production factor intensities according to the analysis. At the same time, the panel quantile regression reveals that the effect of industrial chain connectivity on enterprise total factor productivity differs across firms with varying levels of total factor productivity.