Sustainable total factor productivity growth: The case of China

Abstract

A scientific and rational evaluation of the sustainable development process is of vital and practical significance for not only China but also the entire world. This study incorporates the Ecological Footprint index and the Human Development Index into the translog production function to define and construct a Sustainable Total Factor Productivity Growth index. The Sustainable Total Factor Productivity Growth of 30 provinces in China from 2006 to 2016 was calculated by employing the stochastic frontier analysis method based on the translog production function. The results are as follows. Firstly, from 2006 to 2016, the overall Sustainable Total Factor Productivity Growth of China was slow, indicating sluggish sustainable development. Secondly, factors such as labor productivity and environmental regulations were found to improve sustainable technological efficiency positively, while capital deepening, economic openness, and industrial structure played a negative role in promoting sustainable technological efficiency. Thirdly, Sustainable Total Factor Productivity Growth for China’s regions presented different upward trends in the order of the western, central, and eastern regions, from high to low. Four, the divergence of Sustainable Total Factor Productivity Growth among the provinces revealed a high incidence of economic imbalance, accompanied by the Matthew Effect; thus revealing the problems of unresolved imbalances in China’s sustainable development progress. Hence, to improve China’s Sustainable Total Factor Productivity Growth, it is imperative to focus on measures such as ensuring environmental governance, upgrading the industrial structure, and narrowing the gap in regional development.