International Conference on Construction and Real Estate Management 2016
Total Factor Productivity Growth of China’s Construction Industry: A Stochastic Frontier Approach
Publication: ICCREM 2016: BIM Application and Off-Site Construction
ABSTRACT
This paper deals with measuring total factor productivity (TFP) growth of China’s construction industry using a translog production function model. We estimate the TFP growth indexes and their decomposition using a stochastic frontier analysis (SFA) approach. TFP growth is decomposed into technical progress, changes in technical efficiency, allocative efficiency, and scale effects. A panel data analysis, using the construction industry of China’s 31 provinces over 1997 to 2013, indicates that productivity growth was driven mainly by technical progress that scale effects and allocative efficiency had a positive effect, but changes in technical efficiency had a negative effect. The comparison of the four regions show that there are gaps in productivity development level among western, central, eastern, and northeast regions but the regional disparities shortened over time. The SFA approach provides a good tool to adopt effective policies and strategy to improve the productivity and competitiveness of China’s construction industry.
Get full access to this chapter
View all available purchase options and get full access to this chapter.
REFERENCES
Aigner, D., Lovell, K. and Schmidt, P. (1977). “Formulation and estimation of stochastic frontier production function models.” Journal of Econometrics, 6(1), 21–37.
Battese, G.E. and Coelli. T.J. (1992). “Frontier production functions, technical efficiency and panel data: with application to paddy farmers in India.” Journal of Productivity Analysis, 3(1), 153–169.
Charles, Y.J. and David, A.S. (2005). “Dynamics of strategic management in Chinese construction industry.” Management Decision, 43(4), 551–567.
Charles, Y.J., Kang, J. and David A.S. (2007). “Strategic analysis of large local construction firms in China.” Construction Management and Economics, 25(1), 25–38.
Coelli, T. and Battese, G.E. (1996). “Identification of factors which influence the technical inefficiency of indian farmers.” Australian Journal of Agricultural Economics, 40(2), 103–128.
Ertugrul, D. and Mehmet, B. (2005). “A comparative analysis of productivity growth, catch-up, and convergence in transition economies.” Emerging Markets Finance and Trade, 41(1), 6–28.
Kim, S.H. and Han, G.H. (2001). “A decomposition of total factor productivity growth in korean manufacturing industries: a stochastic frontier approach.” Journal of Productivity Analysis, 16(3), 269–281.
Kodde, D.A. and Palm, F.C. (1986). “Wald criteria for jointly testing equality and inequality restrictions.” Econometrica, 54(5), 1243–1248.
Kumbhakar, S.C., Denny, M. and Fuss, M. (2000). “Estimation and decomposition of productivity change when production is not efficient: a panel data approach.” Econometric Reviews, 19(4), 312–320.
Li, G.C., Feng, Z.C. and Fan, L.X. (2007). “An empirical analysis on the technical efficiencies and the decomposition of TFP of farmer’s house hold management.” The Journal of Quantitative and Technical Economics, 24(8), 25–34 (in Chinese).
Meeusen, W. and Broeck, J.V.D. (1977). “Efficiency estimation from cobb-douglas production functions with composed error.” International Economic Review, 18(18), 435–444.
Tu, Z.G. and Xiao, G. (2005). “China’s industrial productivity revolution: a stochastic frontier production function analysis of TFP growth in china’s large and medium industrial enterprises.” Economic Research Journal, 2005(3), 4–15 (in Chinese).
Xue, X.L., Shen, Q.P., Wang, Y.W. and Lu, J.F. (2008). “Measuring the productivity of the construction industry in China by using DEA-based malmquist productivity indices.” Journal of Construction Engineering and Management, 134(1), 64–71.
Information & Authors
Information
Published In
ICCREM 2016: BIM Application and Off-Site Construction
Pages: 292 - 300
Editors: Yaowu Wang, Ph.D., Professor, Harbin Institute of Technology, Mohamed Al-Hussein, Ph.D., Professor, University of Alberta, Geoffrey Q. P. Shen, Ph.D., Professor, The Hong Kong Polytechnic University, and Yimin Zhu, Ph.D., Professor, Louisiana State University
ISBN (Online): 978-0-7844-8027-4
Copyright
© 2017 American Society of Civil Engineers.
History
Published online: Aug 14, 2017
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.