Estimation and Dynamic Evolution of Provincial Factor-Output Elasticity in China
Zhengzhi Xu, Xiujie Li, Chaojie Zhang, Jiani Zhu, Shangfeng Zhang, Ke Lu
Abstract
Zhengzhi Xu, Xiujie Li, Chaojie Zhang, Jiani Zhu, Shangfeng Zhang, Ke Lu
Abstract
China is currently in a new phase of transition from high-speed growth to high-quality growth, and accurate estimation of element outputs is essential for the smooth progress of the transition. Using the back-fitting method, this study constructed a model of a spatiotemporal-varying elasticity production function to estimate the factor-output elasticity from 1993 to 2017 in 31 Chinese provinces. Nonparametric kernel density method was applied to describe the spatiotemporal evolution characteristics of factor-output elasticity. The results show that the factor-output elasticity of different provinces shows a nonlinear change trend over time and between regions. Overall, the elasticity of labor output shows a decreasing trend, the elasticity of capital output shows an increasing tendency, the eastern region has the lowest level of labor-output elasticity, but the highest level of capital-output elasticity. The western region has the highest level of labor-output elasticity but the lowest level of capital-output elasticity. On the whole, regions with higher resilience in labor output gradually shift towards the West, while capital shifts towards the East.
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China is currently in a new phase of transition from high-speed growth to high-quality growth, and accurate estimation of element outputs is essential for the smooth progress of the transition. Using the back-fitting method, this study constructed a model of a spatiotemporal-varying elasticity production function to estimate the factor-output elasticity from 1993 to 2017 in 31 Chinese provinces. Nonparametric kernel density method was applied to describe the spatiotemporal evolution characteristics of factor-output elasticity. The results show that the factor-output elasticity of different provinces shows a nonlinear change trend over time and between regions. Overall, the elasticity of labor output shows a decreasing trend, the elasticity of capital output shows an increasing tendency, the eastern region has the lowest level of labor-output elasticity, but the highest level of capital-output elasticity. The western region has the highest level of labor-output elasticity but the lowest level of capital-output elasticity. On the whole, regions with higher resilience in labor output gradually shift towards the West, while capital shifts towards the East.
Key concepts: Elasticity (physics), Output elasticity, Econometrics, Economics, Microeconomics, Production (economics), Materials science, Composite material