The Study On Total Factor Productivity And Impacts Of China’s Power Industry

Since the 1980s, a series of regulatory reforms have been carried out in China’s electric power industry, the pace of development is accelerating and various economic indices have improved. However, the overall efficiency of the electric power industry has not increased significantly, electricity reform has a long way to go. This paper will analysis the change of total factor productivity and the factors that influence on TFP during 1990-2011. Based on this analysis, a series of policies will be proposed. It is important for power industry to build a sustained, stable, and healthy development system and improve quantity and efficiency.Firstly, the research method and results of TFP at home and abroad are summarized in this thesis. Secondly, the author introduced current situation of the power industry through concluded the process of China’s power industry refrom, and pointed the main problems of power industry in China at present, for example imperfect pricing mechanism, unreasonable power structure, the slowly process of nrivatization Then elaborated and cnmnared the method of calculating TFP Rased nn this analysis, the new measured of calculating TFP during 1990-2011 was induced, ie, combination of latent variable method(LV) and potential output method(PO). Finally, some important factors that influenced on TFP are discussed.The main findings and conclusions of the power industries TFP will be discussed as follows:(1) the overall TFP of China’s power industries has been improved during the year 1990-2011; (2) China’s power industry TFP showing an overall upward trend after power system reform; (3) the ownership structure, the electricity price and the power structure (power ratio) were all significantly negatively with TFP and TE (technical efficiency), and had no significantly relations with TP (technical progress).; (4) capital deepening (capital-output ratio) negatively correlated with TFP and TP and TE. (5) scale of firm is mainly to promote TFP through the TP, TE has not been promoted, but the effect was not significant.