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. 2023 Mar;30(12):34503-34517.
doi: 10.1007/s11356-022-24282-0. Epub 2022 Dec 14.

Assessing the total factor productivity growth decomposition: the transformation of economic growth momentum and policy choice in China

Feng Luo  1   2 , Feng Chen  3   4 , Dandan Yang  1   2 , Simin Yang  1   2
Affiliations

Assessing the total factor productivity growth decomposition: the transformation of economic growth momentum and policy choice in China

Feng Luo et al. Environ Sci Pollut Res Int. 2023 Mar.

Abstract

How to maintain the momentum of sustained economic growth has always been an important issue of concern to all countries in the world. Using a three-level progressive analysis framework, the article provides an in-depth analysis of the evolution of supply-side economic growth drivers in China from 2003 to 2021 and the magnitude of their roles. The results show that in terms of the composition of growth drivers, total factor productivity makes the largest contribution to economic growth, while the contributions of capital scale and labor scale rank second and third, respectively; in terms of the industrial dimension, the changes in the contributions of each factor to GDP growth mainly originate from the influence of secondary and tertiary industries. From the decomposition of total factor productivity growth, industrial capital productivity and capital allocation structure both play a positive pulling effect on overall capital productivity, but have a weak downward trend. Industrial labor productivity and labor allocation structure both play a slight negative pulling effect on overall labor productivity; from the deep decomposition of growth momentum, industrial factor productivity and industrial factor allocation structure play a major positive pushing effect and a weak negative pushing effect on economic growth, respectively. The conclusion of this paper provides a valuable reference for developing countries on how to maintain the momentum of economic growth.

Keywords: Economic growth; Policy options; Power shift; TFP.

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