Regional Total Factor Productivity Growth Research Articles

Haze pollution, new-type urbanization and regional total factor productivity growth: based on a panel dataset involving all 31 provinces within the territory of China

Purpose This paper aims to analyze the spatiotemporal heterogeneity of regional total factor productivity (TFP) growth and explores how haze pollution and different levels of new-type urbanization affect China’s economic growth. Design/methodology/approach This paper constructs an index for evaluating the TFP growth of China’s 31 provinces by integrating slack-based measures and the Global Malmquist (GM) productivity index. Meanwhile, the panel threshold estimation method is used to examine the complex relationships among haze pollution, new-type urbanization and TFP growth. Findings The results reflect conspicuous spatiotemporal heterogeneity in TFP growth in China. Interestingly, the influence of haze pollution on TFP growth is limited by the “critical mass” of new-type urbanization in China. When new-type urbanization does not cross the first threshold, haze pollution has a negative but non-significant effect on TFP growth. When new-type urbanization crosses the first threshold but not the second, haze pollution has a significant positive impact on TFP growth. When new-type urbanization crosses the second threshold, haze pollution significantly and positively affects TFP growth with the strongest positive effect. Originality/value This study innovates by combining haze pollution and TFP growth and proposing an integrated framework from the perspective of new-type urbanization, providing insight into how different degrees of new-type urbanization impact the mechanism between haze pollution and TFP growth. Using panel data in China and emphasizing green development, a sustainable economy and new-type urbanization, this study contributes to the current studies on haze pollution and economic development based on developed countries.

Consequences of agricultural total factor productivity growth for the sustainability of global farming: accounting for direct and indirect land use effects

Most of the growth in agricultural output in the last thirty years comes from increases in the efficiency with which both land and non-land inputs are used. Recent work calls for a better understanding of whether this efficiency, known as total factor productivity (TFP), contributes to a more sustainable food system. Key to this understanding is the documented phenomenon that, instead of saving lands, the introduction of technologies that improve agricultural productivity encourage cropland expansion. We extend the results of a recently published econometric model of cross-country cropland change and TFP growth to explore the extent to which improvements in technology were associated with lower greenhouse emissions from land conversion to agriculture as well as with lower land conversion pressures in biodiversity-rich biomes. We focus on the decade of 2001–2010, a period in which our sample of 70 countries (≈75% of global croplands) experienced net land contraction. Except in sub-Saharan Africa and South and East Asia, regional TFP growth was associated with regional land expansion, thus confirming the existence of Jevons paradox in most regions of the world. However, such expansion was more than offset by indirect land use effects stemming from increases in productivity somewhere else. These indirect effects are far from trivial. In the absence of TFP growth, our estimates suggest that ≈125 Mha would have been needed to satisfy demand, half of which are in the four most biodiverse biomes of the world; estimated land use emissions from the ensuing changes in land use range from a lower bound of 17 Gt CO2eq to an upper bound of 84 Gt CO2eq, depending on whether the expansion would have occurred on pasturelands or forest, in contrast to the ≈1 to 15 Gt CO2eq imputed to observed cropland expansion. Our projections of the land needed to satisfy projected growth in TFP per capita during 2018–2023 indicate that current rates of TFP growth are insufficient to prevent further land expansion, reversing in most cases the in-sample trends in land contraction observed during 2001–2010.

Investment in Infrastructure and Regional Growth in China

ABSTRACT In this paper we empirically examine the possible effects of regional infrastructure investment on regional per capita income growth and regional total factor productivity (TFP) growth. We first present a theoretical framework for output decomposition and then design a panel data growth model to examine the possible impact of regional infrastructure investment on regional per capita income growth. We find a negative effect of the former on the latter. We also perform a variance decomposition exercise and examine the possible effect of regional infrastructure investment on regional TFP growth. Our results suggest that regional infrastructure investment does not affect regional economic growth through the former’s impact on regional TFP growth. We also examine the possible relationship between regional infrastructure investment and the estimated individual region effects and find a negative correlation between the two.

Effects of Higher Education Levels on Total Factor Productivity Growth

China is facing challenges to sustainable economic growth. Higher education of Chinese residents can affect total factor productivity (TFP) growth and hence has an influence on economic sustainability. However, currently, there is limited literature on the nexus between higher education and TFP in China. Therefore, this paper empirically analyzes the heterogeneous and spatial effect of higher education on the regional TFP growth using a dynamic spatial econometric model with provincial panel data from 2003 to 2016. The results indicate that different levels of higher education have significant effects on TFP growth and are mainly reflected in the spatial spillover effect. Bachelor and doctoral education (particularly doctoral education) demonstrated significant positive effects, whereas the technical school and master education had significant negative effects. When decomposing this effect into technical efficiency and technical progress to explore the mechanism of influences, the latter plays the major role. Therefore, the Chinese government can promote TFP growth and economic sustainability by expanding the scale of bachelor and doctoral education and improving the quality of technical and master education.

Inventor mobility and productivity in Italian regions

ABSTRACTThis paper describes the interregional and international mobility of inventors in Italy and estimates its impact on total factor productivity (TFP) at the regional level for the period 1996–2011. A new database of mobile inventors is constructed and, using a set of geographically based instruments to address endogeneity, it shows that inventor in- and outflows affect regional TFP growth. Moreover, the positive effects of the inventors’ mobility (inflow) between different applicants take more time to materialize (relative to movements within the same company). Finally, the negative effects of inventor outflows are mainly driven by mobility between applicants.

Regional determinants of total factor productivity in Japan: stochastic frontier analysis

As Japan’s birthrate declines and its society ages, governmental policies need to improve the productivity of regional economies in order to sustain regional growth. This study examines social overhead capital and population agglomeration as drivers of total factor productivity (TFP) growth in Japan. The use of stochastic frontier analysis demonstrates that social overhead capital contributes to TFP growth and, especially, influences productive efficiency. Furthermore, the findings reveal that population agglomeration underpins TFP growth in regional economies. Empirical results also indicate that productive efficiency is high in regions where manufacturing is concentrated and that productive efficiency improves when internationally competitive manufacturers concentrate in regional economies. This study endorses the development of social overhead capital to spur Japan’s regional TFP growth. As such, it indicates that providing social infrastructure and enhancing regional productivity are important strategies for the government to consider in its efforts to achieve sustainable regional growth.

The two faces of R&D and human capital: Evidence from Western European regions

AbstractThis paper investigates two channels through which R&D and human capital may affect regional total factor productivity growth in the manufacturing sector. Our model allows for both a direct effect on productivity growth, reflecting own innovation, and an indirect effect, reflecting imitation of frontier technology. The results provide evidence of a positive and significant direct effect of human capital, and a positive and significant indirect effect of R&D. Our estimates also suggest that R&D aids the imitation of technology from geographically close regions, while human capital raises productivity growth in regions that are closer to the frontier than their neighbours.

Creative industries agglomeration, regional innovation and productivity growth in China

This paper falls into the broad area of economic geography and economics of creativity, and it presents an alternative approach to explain why total factor productivity (TFP) growth is different across China’s regions. It establishes an empirical model to estimate the spatial agglomeration effects of creative industries on regional TFP growth, using China’s provincial panel data during the period of 2003 to 2010. We found that the creative industries agglomeration (CIA) has significant and positive impact on regional TFP growth. The result also implies that the CIA can facilitate regional TFP growth through promoting regional innovation instead of improving regional efficiency. Therefore, we argue that policy makers should take some measures to retain and establish more creative zones.

Economic environment, technology diffusion, and growth of regional total factor productivity in China

This paper examines the effects of the regional economic environment and technology diffusion on China's regional total factor productivity (TFP) growth. We build a model of TFP growth in which Chinese regions achieve growth in TFP by making use of technology spillovers from the world technology frontier. We hypothesize that given the world frontier level of TFP, China's regional TFP growth is positively related to regional openness and negatively related to the current level of regional TFP. Empirical analysis in this paper of 29 province-level regions in China strongly supports our hypothesis. By using a nonlinear least squares regression method, we show that regional openness has a significantly positive effect on regional TFP growth. As a by-product, we also estimate a value of the output elasticity of capital that conforms to its traditionally accepted values. The findings of this paper lend strong support to the claim that the opening up process of China promotes the country's economic growth.