TY  - JOUR
AU  - Brandt,Loren
AU  - Biesebroeck,Johannes Van
AU  - Zhang,Yifan
TI  - Creative Accounting or Creative Destruction? Firm-level Productivity Growth in Chinese Manufacturing
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15152
PY  - 2009
Y2  - July 2009
UR  - http://www.nber.org/papers/w15152
L1  - http://www.nber.org/papers/w15152.pdf
N1  - Author contact info:
Loren Brandt
Department of Economics
University of Toronto
150 St. George Street
Toronto, ON  M5S 1A1  CANADA
Tel: (416) 978-4442
E-Mail: brandt@chass.utoronto.ca

Johannes Van Biesebroeck
Centre for Economic Studies
K.U.Leuven
Naamsestraat 69
3000 Leuven
BELGIUM
Tel: +32 16 32 67 93
Fax: +32 16 32 67 96
E-Mail: jo.vanbiesebroeck@econ.kuleuven.be

Yifan Zhang
Lingnan University
Department of Economics
8 Castle Peak Road  Tuen Mun
New Territories  Hong Kong SAR
E-Mail: yifan.zhang@ln.edu.hk
AB  - We present the first comprehensive set of firm-level total factor productivity estimates for China’s manufacturing sector that spans her entry into WTO. We find that productivity growth is among the highest compared to other countries. For our preferred estimate, the weighted average annual productivity growth for incumbents is 2.7% for a gross output production function and 7.7% for a value added production function over the period 1998-2006. Of the various sensitivity checks we carry out, controlling for the increase in labor quality and labor hours, as proxied by the rising real wage, has the largest (downward) effect on the productivity estimates. We further document that new entrants are a particularly dynamic force and that firms experience large productivity declines before exiting from the sample. Overall, net entry contributes roughly half to total TFP growth. Aggregate productivity growth, however, is tempered by a much lower effect of reallocation of inputs towards higher productivity firms, compared to the U.S. benchmark.
ER  -