Estimating TFP based on extended Solow residual value Method: A case study in Yunnan province

Since the reforming and opening up of China, domestic and foreign scholars have made deep researches on the total factor productivity of China, but the different estimation results led to much controversy. Herein, the new method is used to estimate the two key indexes of capital and labor input in the paper. Based on that, by extended Solow residual value Method to undertake an empirical study on the total factor productivity of Yunnan province and its contribution to economic growth. Result shows that since 2003 the growth rate of total factor productivity of Yunnan province is -0.96. The contributive rate of economic growth is -8.60%. The contributive rate of material capital is 64.63%, which indicated the economic growth of Yunnan province is mainly driven by capital investment. The contribution of technological progress to economic growth is negative; the contribution rate of human capital is 6%, the contribution to economic growth remains low.