Explanation on Regional Productivity of China with Malmquist Index

Based on Malmquist Productivity Index and the data of 29 provinces of China within the period of 1991-2007, this paper decomposes the changes of TFP (TFP-ch) into technical changes (TECH-ch) and technical efficiency changes (TE-ch), and makes a further analysis on the convergence of technical efficiency among different sections. The conclusions are as following: (1) In all of the eastern, mid and western part of China, TFP-ch and TECH-ch turned from increase to decrease around the year of 1997, but TE-ch was continuously decrease. (2) TECH-ch explained 75% regional divergence of TFP-ch, and the left 25% was explained by TE-ch. Changes of TFP and its elements before 1997 were helpful to subtract the regional divergence, but after 1997 they went to the contrast. (3) TE-chamong all of the 29 provinces or that among the provinces within each of the eastern, the mid or the western part takes on an emanative trend.