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

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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.

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Data availability

The basic data of this paper are from China Statistical Yearbook. The statistical Yearbook is available at http://www.stats.gov.cn/tjsj/ndsj/.The research data can be found in https://docs.qq.com/sheet/DQ3J0VHdiYlRkSmhr

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Funding

This paper was supported by the Philosophy and Social Science Planning Project of Guangdong Province, “Implementation performance and Policy Optimization of Fiscal Subsidy Policies for Scientific and technological Innovation in Guangdong Province” (no. GD20CYJ33) and “Research on mechanism and policy of heterogeneous knowledge agents’ cooperative innovation in the context of ‘Internet + ’ and manufacturing industry” (no. GD18XGL05).

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Authors and Affiliations

  1. Business School, Foshan University, Innovation and Economic Transformation, Foshan, 528000, China

    Feng Luo, Feng Chen, Dandan Yang & Simin Yang

  2. Upgrading Research Centre of Social Science Research Base, Guangdong Province City, 528000, China

    Feng Luo, Feng Chen, Dandan Yang & Simin Yang

Authors
  1. Feng Luo
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  2. Feng Chen
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  3. Dandan Yang
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  4. Simin Yang
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Contributions

Feng Luo contributed to the conception of the study; Feng Chen performed the experiment; Dandan Yang contributed significantly to analysis and manuscript preparation; Feng Chen and Feng Luo performed the data analyses and wrote the manuscript; Simin Yang contributed significantly to perform the analysis with constructive discussions.

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Correspondence to Feng Chen.

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Luo, F., Chen, F., Yang, D. et al. Assessing the total factor productivity growth decomposition: the transformation of economic growth momentum and policy choice in China. Environ Sci Pollut Res 30, 34503–34517 (2023). https://doi.org/10.1007/s11356-022-24282-0

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