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《Economic Research Journal》 2006-10
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Technical Efficiency, Capital Deepening and Regional Disparity

Fu Xiaoxia~1,2 and Wu Lixue~2,3(1: Business School, Central University of Finance and Economics;2: Institute of Industrial Economic, CASS;3: Beijing Municipal Institute for Economic and Social Development)  
Based on the stochastic frontier production function model, this paper develops a methodology to measure the gap of total factor productivity between regions by parametrical estimation and decompose the regional disparity to capital deepening effect, regional scale effect and technical efficiency effect. The application on China province-level data from 1978 to 2004 indicates TFP and capital can explain most part of the regional income disparities, and the contribution of the latter after 1990 grows up quickly as that of the fore goes down. The convergence tests also show that TFP is diverging much larger than capital per labor and has became the main reason for the regional disparity of China.
【CateGory Index】: F224
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