IESET.
Hypotheses·growth·china_post_wto_market_opening_vs_subsidy_tfp

China's strongest total factor productivity acceleration occurred during the WTO-accession period (2001-2008) linked to tariff reduction, foreign competition, and regulatory harmonisation, while the subsequent subsidy-heavy state-direction phase (post-2008, intensifying post-2015) is associated with weaker TFP growth and rising capital misallocation.

The structural break in TFP growth around 2008-2010 is larger than can be explained by demographics, capital deepening, or the global financial crisis alone, after controlling for human capital, urbanisation, and infrastructure investment.

SUPPORTEDengine/runs/china_post_wto_market_opening_vs_subsidy_tfp

SUPPORTED — shape=ITS, sign matches claim +, mean_gap=+0.1126, z=+3.9

confidence cueThis is a clear pass for the claim as written. It still applies only to this sample, period, and method.

policy briefNeeds review

In ordinary language

Over a long period, do more market-oriented institutions translate into higher income or productivity, once the comparison looks beyond a single success story?

plain answer

The data clearly moved in the predicted direction. shape=ITS, sign matches claim +, mean_gap=+0.1126, z=+3.9

why it matters

Growth claims can look convincing in single success stories. This test asks whether the pattern survives a broader comparison.

how the test works

It compares 1 country or place units from 1990 to 2020, using a event study design.

what was measured
What changed
  • Post wto indicator
  • Post 2008 subsidy intensity
What we checked
  • Productivity growth
  • Capital misallocation index
what this does not prove

A single test is not the whole truth. It narrows the claim under a specific sample, time period, and method. Strong policy conclusions need the pattern to survive nearby tests, alternative data, and serious objections.

verification

0 input datasets, 4 unresolved missing series, provenance status: incomplete.

Results

engine/runs/china_post_wto_market_opening_vs_subsidy_tfp
1007550250199020052020CHN
illustrative sketch · run pending
No coefficients yet. When the model fires, this chart will show tfp_growth across 1 sampled countries over 1990–2020.
The shapes above are stylised — none of the lines are real data.
Placeholder for china_post_wto_market_opening_vs_subsidy_tfp. Published chart will be generated from engine/runs/china_post_wto_market_opening_vs_subsidy_tfp/chart_data.json.

Pre-registration

pre-registered
first-spec commit 5ce4495 · 2026-05-02T19:11:20Z
run generated · 2026-05-15T19:29:09Z

China's strongest total factor productivity acceleration occurred during the WTO-accession period (2001-2008) linked to tariff reduction, foreign competition, and regulatory harmonisation, while the subsequent subsidy-heavy state-direction phase (post-2008, intensifying post-2015) is associated with weaker TFP growth and rising capital misallocation. The structural break in TFP growth around 2008-2010 is larger than can be explained by demographics, capital deepening, or the global financial crisis alone, after controlling for human capital, urbanisation, and infrastructure investment.

Falsification criterion — what would disprove this

set before the run · honoured after

This hypothesis is considered falsified if:

The hypothesis is falsified if China's TFP growth in the post-2008 period is statistically higher than in the 2001-2008 WTO period after controlling for capital deepening and demographics, or if the post_2008_subsidy_intensity coefficient is positive and significant (p < 0.10) in explaining TFP growth.

formal test & threshold
test:      event_study_china_wto_vs_subsidy_tfp_1990_2020
threshold: [object Object]

Method

Template
event_study
Clustering
none
Sample
1 countries · 1990 – 2020
Evidence type
associational

Time-series event-study around WTO accession (2001) and stimulus shift (2008).

Data

VariableSourceTransform
tfp_growth
outcome
pwt:rtfpnatier 3
log_diff_5y
capital_misallocation_index
outcome
constructed:dispersion_of_mrpk_across_firmstier 5
level
post_wto_indicator
treatment
constructed:china_wto_2001_2008tier 5
indicator
post_2008_subsidy_intensity
treatment
constructed:subsidies_to_industrial_enterprises_to_gdptier 5
level
tariff_rate
treatment
world_bank_wdi:TM.TAX.MRCH.WM.AR.ZStier 2
level
capital_deepening
control
pwt:cktier 3
log_diff_5y
human_capital_index
control
pwt:hctier 3
level
urbanisation_rate
control
world_bank_wdi:SP.URB.TOTL.IN.ZStier 2
level
infrastructure_investment_share
control
world_bank_wdi:NE.GDI.FTOT.ZStier 2
level

● ready  · ● pending  · ● reconstruct-needed

Detailed result card

Result card — china_post_wto_market_opening_vs_subsidy_tfp

Verdict: SUPPORTED — shape=ITS, sign matches claim +, mean_gap=+0.1126, z=+3.9

Pre-registration

  • Claim: China's strongest total factor productivity acceleration occurred during the WTO-accession period (2001-2008) linked to tariff reduction, foreign competition, and regulatory harmonisation, while the subsequent subsidy-heavy state-direction phase (post-2008, intensifying post-2015) is associated with weaker TFP growth and rising capital misallocation. The structural break in TFP growth around 2008-2010 is larger than can be explained by demographics, capital deepening, or the global financial crisis alone, after controlling for human capital, urbanisation, and infrastructure investment.
  • Falsification rule: The hypothesis is falsified if China's TFP growth in the post-2008 period is statistically higher than in the 2001-2008 WTO period after controlling for capital deepening and demographics, or if the post_2008_subsidy_intensity coefficient is positive and significant (p < 0.10) in explaining TFP growth.
  • Falsification test: event_study_china_wto_vs_subsidy_tfp_1990_2020
  • Event year: 2001

Estimate

  • shape: single_country_its
  • country: CHN
  • event_year: 2001
  • n_pre: 11
  • n_post: 19
  • pre_trend_slope: 0.0011878587982873
  • pre_trend_intercept: -1.539099379019639
  • pre_residual_sd: 0.028945314323844014
  • end_year: 2019
  • end_year_actual: 0.9645727276802063
  • end_year_counterfactual: 0.8591875347224196
  • end_year_gap: 0.1053851929577867
  • mean_post_gap: 0.1125871368002061
  • z_end: 3.6408377459205723
  • z_mean: 3.8896498252037026
  • post_period_years: [2001, 2019]

Variables resolved

  • pwt:rtfpna → tfp_growth (outcome, publisher=pwt, n=6407)
  • world_bank_wdi:TM.TAX.MRCH.WM.AR.ZS → tariff_rate (treatment, publisher=world_bank_wdi, n=3806)
  • pwt:hc → human_capital_index (controls, publisher=pwt, n=8637)
  • world_bank_wdi:SP.URB.TOTL.IN.ZS → urbanisation_rate (controls, publisher=world_bank_wdi, n=16965)
  • world_bank_wdi:NE.GDI.FTOT.ZS → infrastructure_investment_share (controls, publisher=world_bank_wdi, n=9870)

Variables missing data

  • constructed:dispersion_of_mrpk_across_firms (outcome, name=capital_misallocation_index)
  • constructed:china_wto_2001_2008 (treatment, name=post_wto_indicator)
  • constructed:subsidies_to_industrial_enterprises_to_gdp (treatment, name=post_2008_subsidy_intensity)
  • pwt:ck (controls, name=capital_deepening)

Generated by scripts/run_event_study.py at 2026-05-15T19:29:09+00:00

Strongest opposing argument

Every hypothesis ships with its charitable opposing argument. The framework earns credibility by handling objections at their strongest, not weakest.

Notes

China's data quality is contested, especially for TFP and subsidies. The test uses PWT TFP (standardised across countries) and supplements with firm-level misallocation proxies where available. The 2008 global financial crisis is a confounder partially addressed by comparing pre- and post-crisis windows.

Authored framework. Read the transparency note.