Abstract This paper builds a theoretical framework for calculating factor price distortion coefficients by elements of the enhanced production function. On the basis of this, it also decomposes factor price distortion coefficients which is determined by technology progress deviation diversity and capital deepening change. This paper estimates factor price distortion coefficients by using China’s manufacturing data over period 1978-2013. The analysis results show that the elasticity of substitution between capital and labor is significantly greater than 0 and less than 1, and the relative capital enhanced technological progress rate is rising in most sectors. After 1990, the factor price distortions factor of most manufacturing sectors are showing a downward trend. The main reason for the factor price distortions in the industry is the extensive economic growth mode which causes capital deepening change.
ZHONG Shi-Chuan. Measurement on Market Distortions in the Manufacturing Sector——Based on Perspective of Technology Progress Deviation and Capital Deepening. Economic Survey, 2017, 34(1): 088.
2017, Vol. 34 
