Technological change: Rediscovering the engine of productivity growth in China's rural economy

This paper focuses on measuring the relative importance of the role of technology versus that of institutional innovation in China's rural economy. A six-equation rice sector model explaining provincial-level technology adoption, yield, and factor demand are econometrically estimated using data from China's 13 rice growing provinces for the period 1975–1990. Growth decomposition analysis identifies technology adoption as the most important determinant of rice yield growth during 1978–1984, accounting for nearly 40 percent the change; institutional reform accounted for 35 percent of the growth. In 1985–1990, technology accounts for all of the increase in rice yields. The study demonstrates earlier studies may have over-estimated the impact of decollectivization.