Post-Reform Productivity Performance in Guangdong: 1978-1994

The rapid economic growth in China for the past two decades has recently attracted much attention among economists measuring the post‐reform productivity performance in China. What has been generally ignored in this literature, however, is the heterogeneity of growth performance in different regions in China. In particular, Guangdong province has had a growth rate that is far above the national average. In fact, the growth performance in Guangdong has been so spectacular that it is regarded as a new East Asian ‘Miracle’ and Guangdong is referred to as the ‘Fifth Tiger,’ after South Korea, Taiwan, Hong Kong, and Singapore, in some literature. This paper provides an empirical study on the post‐reform productivity performance of Guangdong. Overall, we find that the productivity growth in Guangdong for the past two decades has been high, and has been increasing over time. More interestingly, we find two significant jumps in productivity growth in 1984 and in 1991. We provide an explanation for our results based on the analysis of the changing political and economic ‘institutions’ due to economic reform in China.