2013•Xiandai caijingRequires access

A Research on the Effect of Vertical Specialization on the Total Factor Productivity

Frank Yonghong Li

Abstract

In this paper,I empirically make an analysis on the related data of China's 31 industries from 2003 to 2010 to testify the functioning mechanism of vertical specialization on the total factor productivity(TFP) based on the trade theory.Furthermore,I also make explanation about the reason for the different effect of different industry,and TFP is dispersed into two effects.In this paper,it concludes that the industries in the vertical specialization with high capital and export intensity can improve the TFP while the industries with high market-concentration can not.And different effects of industry differences will has an impact on changes of TFP through the different effects of technical efficiency(EF) and technical progress(TE).

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Key concepts: Total factor productivity, Economics, Productivity, Industrial organization, International trade, Technical progress, China, Capital (architecture)