The technical structure and origins of productivity growth: evidence from industry-level panel data of China's manufacturing industry

Technical change appears combined with capital investment and its structure has played a greater role in productivity in the past few decades, while there is little literature which focuses on capital-embodied technical change and appropriate technical structure in developing countries. This paper investigates China's embodied technical change and structure of disembodied and embodied technology. In this paper, the sector-level index of total factor productivity stands for disembodied technical change through the dynamic frontier nonparametric approach, and embodied technological change is measured by the core-machinery approach. Empirical results show that capital-embodied technical change is the key factor to productivity, and technical efficiency is determined by factor endowments and the matching level among factors. And in the whole economy, appropriate technical structure is not significant, while in those sectors with high nationalization levels and high profit rates it is significant.