The Development of 23 Industrial Sectors in Western China: Scale and Productivity

by Ke Zhang

East-West Center Working Papers, International Graduate Student Conference Series, No. 28

Publisher: Honolulu: East-West Center
Publication Date: 2006
Binding: paper
Pages: 14
Free Download: PDF


Since 1999, China has been implementing strategy of western development for more than six years. As the economic base, western industrial sectors are one of main development object of the strategy. The growth and efficiency changes of local sectors partially reflect the policy effect of the strategy. This paper is trying to shed light on the growth and productivity changes of industry mix in western region to assess policy effect of strategy of western development. According to neoclassical economic growth theory, input factors, such as capital, labor, etc. and TFP are direct resources of growth. This paper applied the basic analysis framework to industrial sector level. Capital growth is used to show scale expanding. Total factor productivity is looked as the basic potential competitiveness. High and low TFP distinguish two different growth modes. In order to find the change of western industrial sectors, shift-share analysis is employed, which tells the difference between growth rate of local sectors and national ones. Based on DEA the productivity change of each sector is analyzed and compared with each other, which reflect the basic competitiveness of sectors and predict the developing potentiality. This paper also discusses the technological efficiency of local sectors and explains the growth mode. The general finding is that most industrial sectors of western regions show productivity growth but the efficiency improvement is relatively slower than technical frontier's progress.