Determinants of economic growth in China: Private enterprise,education, and openness

This essay investigates the source of cross-provincial variations of economic growth in China. A statistical analysis of data on 29 provinces, municipalities, and autonomous regions from 1978 through 1989 confirms the findings in the literature of empirical studies of economic growth based upon cross-country empirical analyses, and uncovers some characteristics unique to China. We find that private and semi-private enterprises, higher education and international trade all lead to an increase in economic growth in China. We also find that high fertility, high inflation, and the presence of state-owned enterprises (SOE) reduce growth rates among the provinces. Finally, our evidence indicates that the convergence hypothesis holds in China.     

Higher education,employment and economic growth: Exploring the interactions

ABSTRACT

This article interrogates the impact and nature of South Africa’s post-apartheid economic growth performance through the lens of human capital investment with a particular emphasis on higher education. The South African economy has been characterised by a skills-biased trajectory, ensuring jobs for the better educated. By differentiating between tertiary and vocational training, we find that further education and training (FET) graduates are almost as likely to be employed as school leavers without higher education. We analyse the extent to which the educational attainments of labour affect the nature and trajectory of economic growth in South Africa, by estimating Olley and Pakes’ two-stage regression on a modified Cobb–Douglas production function. The results indicate that the degree cohort contributes to economic growth whilst other higher education institutions, including FET colleges, do not productively contribute to economic growth.     

Health investment,physical capital accumulation,and economic growth

This paper analyzes the effect of health investment, and hence of health capital, on physical capital accumulation and long-run economic growth in an extended Ramsey model with an Arrow–Romer production function and a Grossman (1972) utility function. The paper concludes that economic growth is related to both the health growth rate and the health level. While growth in health capital always facilitates economic growth, the gross effect of health level on the rate of economic growth depends on how it affects physical capital accumulation. If the negative effect of health on economic growth through its influence on physical capital accumulation is not taken into consideration, then health level has a positive effect on the rate of economic growth by improving the efficiency of labor production. However, since health investment may crowd out physical capital investment and thus influence physical capital accumulation, excessive investment in health may have a negative effect on economic growth. Empirical tests of these theoretical hypotheses using panel data from individual provinces of China produce results that are consistent with our theoretical conclusions.     

Rapid growth and changing economic structure: The expenditure side story and its implications for China

The purpose of this essay has not been to provide China with a detailed list of all of the things that the country must do to maintain a high growth rate. The purpose of this essay instead has been to analyze some of the most basic choices that China must make going forward, choices that are not yet fully understood either by government or private analysts. China has a very unusual economic structure at least on the aggregate demand side and that creates special challenges that other countries have not had to face to the same degree. How well China handles these challenges will determine whether it will continue to progress rapidly to middle income status and beyond.     

Brain drain,brain gain,and economic growth in China

We have used Chinese provincial data (1980–2005) to examine the effects of permanent and temporary emigration on human capital formation and economic growth in source regions. First, we find that permanent emigration is conducive to the improvement of both middle and high school enrollment. In contrast, while temporary emigration has a significantly positive effect on middle school enrollment it does not affect high school enrollment. Moreover, the different educational attainments of temporary emigrants have different effects on school enrollment. Specifically, the proportion of temporary emigrants with high school education positively affects middle school enrollment, while the proportion of temporary emigrants with middle school education negatively affects high school enrollment. Finally, we find that both permanent and temporary emigration has a detrimental effect on the economic growth of source regions.     

Cultural heterogeneity,social policy,and economic growth in China

By using World Values Survey (WVS) data and other datasets, this paper measures the heterogeneity of Chinese residents' values and explores the relationships among cultural diversity, economic growth, and social policy in China. The study finds that, from 1990 to 2013, there was an overall rise in the value heterogeneity of Chinese residents, and cultural heterogeneity is mainly driven by within-group rather than between-group heterogeneity. Groups of residents with higher levels of income and education seem to have a lower degree of value heterogeneity. Panel-data regressions show that cultural heterogeneity is negatively correlated with provincial economic growth, and positively correlated with social conflict. Although social policies cannot directly affect cultural diversity itself, they may impact the way that cultural heterogeneity influences economic and social outcomes. In provinces with relatively low fiscal expenditures on education, cultural diversity has a stronger negative effect on GDP growth and a larger positive effect on social conflict. A social policy that boosts social security expenditures could also weaken the positive effect of cultural diversity on social conflict.     

Health insurance reform and economic growth: Simulation analysis in Japan

This paper evaluates the drastic reforms of Japanese public health insurance initiated in 2006. We employ a computable general equilibrium framework to numerically examine the reforms for an aging Japan in the dynamic context of overlapping generations. Our simulation produced the following results: first, an increase in the co-payment rate, a prominent feature of the 2006 reform, would promote economic growth and welfare by encouraging private saving. Second, the ex-post moral hazard behavior following the increase in co-payment rates, however, reduces economic growth. Third, Japan's trend of increasing the future public health insurance benefits can mainly be explained by its aging population, and increasing the co-payment rate does little to reduce future payments of public health insurance benefits. Fourth, the effect on future economic burdens of reducing medical costs through efficiencies in public health insurance, emphasis on preventive medical care, or technological progress in the medical field is small. Finally, a policy of maintaining public health insurance at a fixed percentage of GDP will require reducing public health insurance benefits, perhaps up to 45% by 2050. Such a policy also reduces economic growth until approximately 2035. Our simulation indicates that the reform does not significantly reduce future public health insurance benefits, but it can enhance economic growth and welfare by encouraging private saving.     

Resource abundance and economic growth in China

This paper revisits the resource curse phenomenon in China and differs from the previous studies in four respects: (i) City-level data is used; (ii) A spatial variable is constructed to estimate the diffusion effect of natural resources among cities in the same province; (iii) The impact of resource abundance on economic development is investigated not only at the city level but also at the prefectural level in China; (iv) We use a functional coefficient regression model to deal with city-specific heterogeneity and, at the same time, analyze the transmission mechanism of the resource curse phenomenon. Our empirical results show that there is no significant evidence to support the existence of a resource curse phenomenon in China. On the other hand, we find that the degree of natural resource abundance in a city has a positive diffusion effect on the economic growth of neighboring cities within the same province at the city level, but not at prefectural levels. We attribute this to the urban bias policy.     

Population dynamics and economic growth in China

This paper focuses on two major elements of China's population dynamics—the rising proportion of workers in the population and the shift of rural workers from agriculture into industry and services—in a provincial-level analysis of per capita income and productivity growth during the last three decades. We measure the ‘mechanical’ contributions of these dynamics to per capita income as revealed by growth decompositions, before assessing the determinants of per capita income and productivity growth in a series of regressions that include the growth of the working-age to total population (WAP) ratio and a measure of sectoral employment change. Our results indicate that sectoral change has made a significant positive contribution to both per capita income growth and aggregate productivity growth, stemming from its positive impact on agricultural productivity growth—as predicted by the Lewisian dual economy model. However, the negative impact of sectoral change on productivity growth in the industrial and service sectors, combined with the negative impact of growth of the WAP ratio on both per capita income and aggregate productivity growth, suggests that the benefits of China's population dynamics during the last three decades have been overstated.     

Thirty years of legal and economic reform in China: growth,institutions, and laws

China's impressive economic growth over three decades has seemingly occurred in the absence of a strong legal system. This paper views China's reform process over the past three decades as one that has entailed a gradual introduction of market forces into areas of the economy, which requires both dismantling the structure of the centrally planned economy and developing market-oriented institutions. This paper argues that China's transition is premised on a set of informal, and increasingly formal, institutions that provided incentives during the process of gradual liberalization. Therefore, institutional developments were not absent. The exploration of the interplay between growth and institutions leads to the conclusion that continued economic growth in China will depend on implementing legal reforms better suited to the nature of the decentralized economy, hastened by the introduction of international economic laws and rules with greater global integration.     

Financial development and economic growth: Evidence from China

This paper investigates the relationship between financial development and economic growth for the case of China over the period 1952–2001. After considering the time series characteristics of the dataset, a multivariate vector autoregressive (VAR) framework is used as an appropriate specification and the long-run relationship among financial development, growth and other key growth factors is analyzed in a theoretically based high dimensional system by identification of co-integrating vectors through tests of over-identifying restrictions. The empirical results suggest that there exists a unidirectional causality from economic growth to financial development, conclusions departing distinctively from those in the previous studies.     

Forces of economic growth in China,India, and other Asian countries

This paper applies different approaches to modelling sources of economic growth from time series and panel data sets for 10 Asian countries over the period 1970–2010. After being subjected to fragility tests, the cross‐country estimates indicate that investment, together with policy variables and openness to trade, explains about 90 per cent of the estimated 3.2 per cent steady‐state growth rate for the region. Regional growth policy points to expanding trade, supporting financial development, and maintaining sound investment environments. Although country‐specific growth effects vary, the results imply that different estimation methods, combined with fragility tests, can help establish stronger links between growth theory and policy advice.     

Targeted poverty investments and economic growth in China

In the mid-1980s, the Chinese government launched its ambitious poor area development policy, which was centered around a series of grant, credit, and Food-for-Work programs. Ironically, for the remainder of the 1980s rural poverty remained at about 90 to 100 million, or approximately 10% of the rural population. The lack of progress cannot necessarily be blamed on ineffective poor area policies, since much of the agricultural economy was mired in a deep recession between the mid-1980s and the early 1990s. By the mid-1990s substantial additional poverty reduction had been achieved. Even in the late-1980s, farmers in many poor counties did better than the national average in terms of income growth. After accounting for the effects of macroeconomic elements, what factors can help explain the differences in performance among poor regions and between poor areas and rich ones? Can part of these differences be accounted for by poor area policies, in general, or by the way local and regional officials allocate their poor area investment funds, in particular?The overall objective of this paper is to analyze the effectiveness of Chinese poor area policy. Specifically, the paper seeks to meet three objectives. First, we want to understand the evolution of poor area policy since the mid-1980s, trying to deduce the true goals of central and regional poor area officials, as well as how these policies have been implemented in the provinces. Next, we want to understand the magnitude and scope of investment into poor areas, and examine if changes in these policies have affected the uses of the investment funds. Finally, we want to determine the effectiveness of the investment of poor area funds, analyzing which types of investments have generated growth, and which ones have not.     

Spatial spillover and regional economic growth in China

This paper investigates the spatial structure of the provincial economic growth and the spatial spillover in China from 1998 to 2008. First, we apply Moran's index to detect the positive spatial autocorrelations across the provinces of China. Second, we build a new economic geography model and the role of market potential in promoting regional income growth is highlighted. Third, two measures of market potential are constructed and a spatial error model is adopted to obtain the estimations, considering spatial autocorrelation. Controlling for major inputs, such as labor, capital, and human capital, the market potential continues to promote substantial regional growth. On average, an increase of 10 percentage points in the market potential increases the regional GDP per capita growth by 3–5 percentage points.     

农村教育对中国经济的影响

21世纪的竞争焦点是人才资源，而决定人才数量和质量的关键在于教育。对于有着9亿农村人口的中国来说，农村教育状况关系整个国家的未来。改革开放以来，在农村改革和经济发展的推动下，我国农村教育状况有了很大的改善，但随着财政体制和农村经济状况的变化，农村教育也面临着严峻的形势和严重的困难。本文从农村教育对中国经济发展的作用，当前农村教育面临的问题及克服困难的建议等方面对中国农村教育略做探索。     

Fiscal policy and economic growth: some evidence from China

Review of World Economics - China has experienced profound economic and social changes in recent decades. During this period, China’s fiscal policy framework has been substantially reformed....     

Spatial externalities in China regional economic growth

Using spatial econometric techniques, this paper presents an empirical analysis of the growth performances of Chinese prefectures over 1991 to 2007 period. Based on the Solow growth theory with technology spillovers, a Spatial Durbin growth model recently developed is employed to capture the spatial externalities. We find strong evidence of positive spatial dependence between Chinese prefectures after 1991. Apart from the usual divergence conclusions, we find evidence for significant conditional convergence force when the spatial spillover effects are controlled. Our results also indicate the competition effect of capital accumulation and urbanization growth among neighboring regions. Moreover, spatial convergence clubs are detected and the spatial interactions and growth behavior varies.     

Dynamics between government spending and economic growth in China: an analysis of productivity growth

This study investigates the dynamics between government spending and economic growth in China through influencing the productivity growth of human capital byapplying Markov switching estimates for the annual time series data of China over the period 1952–2014. Firstly, we found that the Chinese economy exists in two states including state one with low growth and state two with high growth. Secondly, the consumption spending has significantly positive effect both states, while the military spending has only positive effect in state two. Interestingly, the growth effect level of consumption spending in state two is smaller than that in state one, implying a reducing effect of total factor productivity in state two. Thirdly, the combined effects of consumption spending and military spending with human capital are state dependent. This combined effect is reduced in both states, suggesting that government spending does not improve the productivity growth effect of human capital.