Misallocation Measurements And It's Economy Effects Analysis—across Provinces And Sectors In China

Neoclassical Growth Model and Endogenous Growth Model have successfully explain the problem of growth in different countries with different perspectives.As an new development of Economy Growth Theory,Hesieh & Klenow(2009)put forward Misallocation Theory.They held the points of view that reallocate production resources could increase Total Factor Productivity to a great extent.This article follows Hesieh & Klenow(2009)and Brandt et al.(2011)'s definition of misallocation and their methods to measure the effects of misallocation Neoclassical Growth Model and Endogenous Growth Model have successfully explain the problem of growth in different countries with different perspectives.As an new development of Economy Growth Theory,Hesieh&Klenow(2009)put forward Misallocation Theory.They held the points of view that reallocate production resources could increase Total Factor Productivity to a great extent.This article follows Hesieh&Klenow(2009)and Brandt etacross sectors and provinces from 2003 to 2015,and analysis it's effects to Total Factor Productivity.With a little difference,I introduced varying elasticity product function to the original model and use Kalman Filter to evaluate heterogeneous production elasticity.The main conclusions are as follows:(1)Misallocation across provinces and sectors is exited and persisted.According to the definition of misallocation from Hesieh and Klenow(2009),it's the marginal revenue differential across product units.So this article uses the gap of product marginal revenue between state sector and non-state sector to reflect the misallocation between sectors,moreover,it uses the dispersion degree to portray the misallocation among provinces for a certain type of sector.I find that the misallocation of capitals between state-sector and non-state sector are large,while the misallocation of labors are relatively small;the misallocation of labors(the range of dispersion degree is 0.353 to 0.399)and capitals(the range of dispersion degree is 0.328 to 0.477)among provinces in state sectors are relatively small,while the misallocation of capitals(the range of dispersion degree is 0.689 to 0.967)among provinces in non-state sectors is huge,the misallocation of labors(the range of dispersion degree is 0.364 to 0.428)among provinces in non-state sectors is relatively small.(2)If we eliminate all the misallocation,the total factor productivity could be promoted by 47.74%.Within misallocation contribute 36.68 percentages,while between misallocation just contribute 13.82 percentages.(3)Within misallocation is much sensitive to capital differences between sectors.On the contrast,between misallocation is much sensitive to labor's differential across province.