Abstract: It is helpful to deepen the understanding of the history and current situation of China′s retail industry by analyzing the growth model and the driving factors of retail industry, and further screening the reasons for the change of total factor productivity. This paper uses growth accounting method and stochastic frontier analysis to systematically measure and decompose the total factor productivity (TFP) of Chinese retailing since 1998. The empirical results show that there are two important time nodes for retailing development: one is the entry of foreign capital in 2004 and the other is the financial crisis in 2008;on the industry level, the reasons why TFP of retailing stagnates in recent years are the low-rate development of No-shop Retail, integrated retailing, household electric appliances retailing and garments retailing; from the perspective of TFP decomposition, the change of TFP is mainly caused by technology progress and technical efficiency improvement. Besides, this paper shows that Chinese retailing is a typically “Constant Returns to Scale” industry, and there is a misallocation of retail resources in the long term.

Key words: retailing, Total Factor Productivity, growth accounting, Stochastic Frontier Analysis