A Study On The High-tech Industries Total Factor Productivity

Based on the industry level and provincial data of hi-tech industry in China during 2000 and 2005, this paper examines the changing trend and characteristics of TFP of hi-tech industry. In this paper, TFP is divided into two parts, namely frontier technological progress and technical efficiency. Then we discuss their effect on TFP separately.As we know, the increasing of production output is the outcome of TFP and factor input improvement. And the improvement of TFP can be attributed to technical efficiency enhancement and technological progress. This paper shows that technical efficiency is a measurement index for technology usage, while frontier production function is the basis for measuring technical efficiency. Since stochastic frontier production function takes into account many factors, such as inefficiency of technology usage for producers and exogenous stochastic factors, it is reasonable to choose this model to estimate the technical efficiency in hi-tech industry.With the inference of stochastic frontier production function, we derived the measurement method for frontier technological progress and technical efficiency. Combined with the reality in hi-tech industry in China, this paper researches the changing of TFP in two aspects, namely inter-industry level and regional level. The result shows that frontier technological progress contributes to TFP at a ratio of 14.83% for large and medium size enterprises. And the increasing of technical efficiency gap leads to a decrease of TFP at a percentage of 3.36. Compared with eastern regions, the speed of technological progress in western regions is faster, while the usage efficiency is lower.With the analysis above, we put forward countermeasures as follows. For enterprises with low technical efficiency, it is urgent to improve management, implement institutional reform and establish appropriate supporting system for technological usage. As for industries with low level frontier technological progress, it is necessary to enhance R&D input so as to realize the breakthrough of technical innovation.