This chapter introduces the two main drivers of economic growth—factor input expansion and productivity improvement—emphasizing the central role of productivity in structural upgrading and sustainable development. It systematically explains key concepts including productivity (single-factor, multi-factor, and total factor productivity), technical efficiency, scale efficiency, allocative efficiency, energy efficiency, and carbon emission performance. The chapter then reviews the principal measurement methods for efficiency and productivity, covering parametric approaches (linear programming, stochastic frontier analysis, econometric methods) and non-parametric approaches (DEA, the Malmquist TFP index), and evaluates their respective strengths and limitations. By synthesizing these comparisons, we also provide guidance on the appropriate use of different methods in future research and applications. Economic growth is primarily driven by factor input expansion and productivity enhancement. While factor accumulation solely contributes to quantitative scaling, productivity growth simultaneously drives output aggregation and structural upgrading through qualitative transformation. Consequently, efficiency analysis forms the cornerstone of economic science, fundamentally concerning Pareto-efficient resource allocation that maximizes output with minimal inputs. This paradigm is formalized in neoclassical theory as cost minimization (profit maximization) in producer optimization and utility maximization in consumer choice. As global development shifts toward a sustainable model, efficiency and productivity metrics have become key indicators for measuring progress in achieving the Sustainable Development Goals (SDGs). Labor productivity (LP) and total factor productivity (TFP) have evolved from academic concepts to core assessment tools in supporting international cooperation and progress tracking. Achieving targets such as energy transition (SDG 7), industry innovation (SDG 9), and climate action (SDG 13) requires systematically improving resource efficiency and reducing carbon emission intensity. To this end, productivity analysis must incorporate environmental cost accounting to break the old “growth-pollution” path dependency and drive a global transition toward a low-carbon and equitable future. This challenge not only affects the quality of development in individual countries but is also central to balancing human development with the planet’s ecological security.

Basic Concepts and Guidelines

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发表日期：

2026年

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Ning Zhang,
Kerui Du

摘要

This chapter introduces the two main drivers of economic growth—factor input expansion and productivity improvement—emphasizing the central role of productivity in structural upgrading and sustainable development. It systematically explains key concepts including productivity (single-factor, multi-factor, and total factor productivity), technical efficiency, scale efficiency, allocative efficiency, energy efficiency, and carbon emission performance. The chapter then reviews the principal measurement methods for efficiency and productivity, covering parametric approaches (linear programming, stochastic frontier analysis, econometric methods) and non-parametric approaches (DEA, the Malmquist TFP index), and evaluates their respective strengths and limitations. By synthesizing these comparisons, we also provide guidance on the appropriate use of different methods in future research and applications. Economic growth is primarily driven by factor input expansion and productivity enhancement. While factor accumulation solely contributes to quantitative scaling, productivity growth simultaneously drives output aggregation and structural upgrading through qualitative transformation. Consequently, efficiency analysis forms the cornerstone of economic science, fundamentally concerning Pareto-efficient resource allocation that maximizes output with minimal inputs. This paradigm is formalized in neoclassical theory as cost minimization (profit maximization) in producer optimization and utility maximization in consumer choice. As global development shifts toward a sustainable model, efficiency and productivity metrics have become key indicators for measuring progress in achieving the Sustainable Development Goals (SDGs). Labor productivity (LP) and total factor productivity (TFP) have evolved from academic concepts to core assessment tools in supporting international cooperation and progress tracking. Achieving targets such as energy transition (SDG 7), industry innovation (SDG 9), and climate action (SDG 13) requires systematically improving resource efficiency and reducing carbon emission intensity. To this end, productivity analysis must incorporate environmental cost accounting to break the old “growth-pollution” path dependency and drive a global transition toward a low-carbon and equitable future. This challenge not only affects the quality of development in individual countries but is also central to balancing human development with the planet’s ecological security.