A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth before and after Reforms

Our objective in this paper is to explain a method to decompose the sources of total factor productivity (TFP) growth into technological progress and changes in technical efficiency within the framework of the varying coefficients frontier production function. An empirical application is demonstrated using the Chinese provincial-level agricultural data covering the period 1970–87. The results indicate that TFP growth in the prereform period was negative in twenty out of twenty-eight provinces and that it was positive in almost all provinces during the reform periods, while negative in sixteen out of twenty-eight provinces in the postreform periods of 1984–87. Copyright 1996, Oxford University Press.