Learning Effect and Productivity Convergence of Chinese Industrial Enterprises

Abstract

The main purpose of this paper is to test the production efficiency of different Chinese property industrial enterprises. Based on the large sample panel data of industrial enterprises of the National Bureau of Statistics, we found that although the production efficiency of China-funded enterprises is generally weaker than foreign-funded enterprises, some China-funded enterprises have better learning ability. On the one hand, dynamic analysis found that private enterprises have significant learning ability. On the other hand, the results of convergence analysis show that China’s private enterprises have the potential to gradually catch up with the frontier level of world production efficiency and have better learning ability to catch up potential. And state-owned enterprises tend to be more efficient at the beginning of their establishment, but their productivity is fairly slow to improve, especially for state-owned enterprises with high efficiency sub-samples, so that it’s hard for them to continue improving their efficiency. Institutional analysis found that the marketization process helped the China enterprises to improve their learning ability and China should continue to strengthen the reform of property rights and promote the marketization process.