Productivity growth in Pearl River Delta during reform period#x2217; — A malmquist index analysis

摘要

To evaluate productivity growth in Pearl River Delta under its booming economy, we measure total factor productivity (TFP) and its decomposition from 1978 to 2008 using Malmquist Index. Moreover, the paper testifies empirically the contribution from human capital and FDI to TFP. In conclusion, TFP has increased significantly since 1978, most of which is due to technical change. Furthermore, human capital is a crucial contributor in TFP. The correlation between FDI and TFP varies according to the source of FDI, in which FDI from Hong Kong, Macau and Taiwan exerts negative influence over TFP. Consequently, the government should prompt structural change of economy and lay more emphasis on higher education.