An International Comparison of the TFP Levels of Japanese, South Korean, and Chinese Listed Firms

Abstract

To compare the TFP level of firms in Japan, China, and

South Korea, we first estimated the TFP of firms in each

country using the method of Good, Nadiri, and Sickles (1997).

Then we estimated the relative TFP by industry in the

benchmark year using Japanese industries as benchmarks and

combined the estimated TFP of firms. When estimating relative

TFP by industry for South Korea and China, we applied the

industry-level price estimates of the three countries from the

ICPA project and converted industry outputs and inputs into the

same currency unit (Japanese Yen). The estimation results

obtained indicate that the productivity of Japanese firms is still

higher than that of their Chinese and South Korean counterparts

but that the productivity of South Korean firms is rapidly

increasing, with the emergence of some firms that are now

overtaking their Japanese rivals in terms of productivity, particularly

in the electric machinery sector.