Publication Type
Working Paper
Version
publishedVersion
Publication Date
12-2020
Abstract
This paper studies how the trade liberalization in China changes the firm productivity. We develop a framework to estimate revenue productivity (TFPR) and real productivity (TFPQ) with multi-product firms. We find that the aggregate TFPR increases 30\% from 2002-2007 and TFPQ increases 22\%, suggesting that the observed TFPR increase is mainly driven by real productivity change rather than the markup change. We further decompose the change of productivity into three channels: (1) access to foreign inputs; (2) technology upgrade; (3) resource re-allocation within the firm. We find the most significant channel is the last one, which explains half of the aggregate productivity increase. We also find that the SOEs and private firms significantly improve the TFPR. However, private firms TFPR increase mainly come from the increase of TFPQ, while only 65\% of the TFPR increase of SOEs can be attributed to change of TFPQ.
Keywords
Production function estimation, TFP, trade, China
Discipline
Asian Studies | Industrial Organization
Research Areas
Applied Microeconomics
First Page
1
Last Page
25
Citation
ONISHI, Ken; XU, Jianhuan; and YANG, Guang.
Firm productivity and the variety of inputs and outputs: Evidence from Chinese trade data. (2020). 1-25.
Available at: https://ink.library.smu.edu.sg/soe_research/2516
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.