Obstacles to the development of China's marine economy: Total factor productivity loss from resource mismatch

Abstract

The total factor productivity (TFP) of the marine economy loss due to the resource mismatch remains a major obstacle to the development of China's marine economy. This study analyzes the intrinsic mechanism of the four types of capital mismatches, including natural, knowledge, social, and institutional, affecting the TFP of the marine economy. Firstly, the Stochastic Frontier Analysis model is used to obtain the TFP in 11 Chinese coastal provinces from 2000 to 2020. Then the four types of capital are unified into the HK model to study their spatio-temporal characteristics, and the extended Syrquin decomposition is used to analyze the sources of the changes in the marine economic output during the whole study period. At the same time, we estimate the output gap and the contribution of distortionary changes in each type of resource. Finally, we use Bootstrap to measure the impact of each type of resource mismatch on TFP. The results show that ① TFP is on the rise and belongs to the middle level. Nevertheless, there is a slow growth rate, noticeable regional differences, with a specific "path dependence". ② All capitals are distorted, and only the distortion coefficient of natural capital is greater than 1. Spatially, resources are under-allocated in the economic pioneer regions and over-allocated in the latecomer regions. ③ At present, China's marine economic growth is mainly driven by resource inputs. Correcting the inter-regional resource distortion can raise output by 21%. ④ The contribution of knowledge and social capital distortions is positive but small, while institutional and natural capital contribute more but fluctuate sharply. Resource allocation tends to be rationalized in Shanghai, Zhejiang, Fujian, Shandong, and Guangdong. ⑤ The mismatch of natural capital shows an “inverted U-shaped” trend, with 2006 as the "inflection point". The mismatch of knowledge, social, and institutional capital shows a decreasing trend and remains stable. Mismatch of all capitals harms the TFP of the marine economy, and institutional capital mismatch has the greatest impact. This assessment framework can measure the extent of other resource mismatches in other regions of the world, and the results of the study can provide lessons for localities to promote efficient resource allocation and enhance TFP in the marine economy.