The Political Economy of China´s Manufacturing Labor Productivity

In the perspective of political and economic analysis, the paper decomposes the sources of manufacturing labor productivity growth into four parts: technological progress, the effect of increasing returns to scale, capital deepening caused by wages and institutional changes. We can get the empirical results as follows: technological progress and the effect of increasing returns to scale stimulate the labor productivity growth. The contribution of capital deepening caused by wage growth is on starting stage. The effect of institutional variable on behalf of government plays a significant role on labor productivity progress, but its effect is descending.