Productivity,efficiency and technical change: measuring the performance of China’s transforming agriculture

As China enters the twenty-first century the health of the agricultural economy will increasingly rely, not on the growth of inputs, but on the growth of total factor productivity (TFP). However, the tremendous changes in the sector—sometimes back and sometimes forwards—as well as evolving institutions make it difficult to gauge from casual observation if the sector is healthy or not. Research spending has waxed and waned. Policies to encourage the import of foreign technologies have been applied unevenly. Structural adjustment policies also triggered wrenching changes in the sector. Horticulture and livestock production has boomed; while the output of other crops, such as rice, wheat and soybeans, has stagnated or fallen. At a time when China’s millions of producers are faced with complex decisions, the extension system is crumbling and farmer professional associations remain in their infancy. In short, there are just as many reasons to be optimistic about the productivity trends in agriculture as to be pessimistic. In this paper, we pursue one overall goal: to better understand the productivity trends in China’s agricultural sector during the reform era—with an emphasis on the 1990–2004 period. To do so, we pursue three specific objectives. First, relying on the National Cost of Production Data Set—China’s most complete set of farm input and output data—we chart the input and output trends for 23 of China’s main farm commodities. Second, using a stochastic production frontier function approach we estimate the rate of change in TFP for each commodity. Finally, we decompose the changes in TFP into two components: changes in efficiency and changes in technical change. Our findings—especially after the early 1990s are remarkably consistent. China’s agricultural TFP has grown at a healthy rate for all 23 commodities. TFP growth for the staple commodities generally rose around 2% annually; TFP growth for most horticulture and livestock commodities was even higher (between 3 and 5%). Equally consistent, we find that most of the change is accounted for by technical change. The analysis is consistent with the conclusion that new technologies have pushed out the production functions, since technical change accounts for most of the rise in TFP. In the case of many of the commodities, however, the efficiency of producers—that is, the average distance of producers from the production frontier—has fallen. In other words, China’s TFP growth would have been even higher had the efficiency of production not eroded the gains of technical change. Although we do not pinpoint the source of rising inefficiency, the results are consistent with a story that there is considerable disequilibrium in the farm economy during this period of rapid structural change and farmers are getting little help in making these adjustments from the extension system.     

Sino-Indian Liberalization: The Role of Trade and Foreign Investment

Two major factors account for a country’s growing integration with the global economy: trade and foreign investment; expansion of exports, and foreign direct investment (FDI). Growth of exports became a dominant source of industrial growth during the 1980s in most developing countries (see Helleiner, 1995). Most of these countries including China and India, have replaced the old import-substitution policy by an export promotion strategy. Both domestic and international factors played an important role in the shift of national policies to repay debts. The process of globalization already underway necessitated export orientation for improving technology, management practices, marketing and international competitiveness. This paper aims at exploring the contributions of exports and FDI to growth and economic liberalization in China and lndia. The first section briefly reviews similarities and differences in the two economies. The second section deals with growth, composition and direction of foreign trade. The third section examines the role of FDI, and its sources and composition by sector, industry, and by overseas ethnic Chinese and Indians. Trade and FDI linkages are examined in the fourth section which also contains a brief case study of Guangdong (China). This revised version was published online in July 2006 with corrections to the Cover Date.     

经济转型下的外商直接投资、国内资本与经济增长——基于中国时间序列数据的计量检验与实证分析

经济转型背景下,中国经济持续增长的一个重要原因是引入外商直接投资。本文对1985年-2010年中国外商直接投资、国内投资与经济增长的总量时间序列数据进行了实证分析。结果表明:FDI与国内资本对我国的经济增长的影响显著,都是GDP的格兰杰原因,与经济增长存在长期均衡关系;但FDI对经济增长的影响小于国内资本,并且FDI与国内资本还存在相互挤入效应。     

Public infrastructure as a determinant of productive performance in China

Public infrastructure investment is an essential part of China’s regional development policy. This raises the question to what degree public infrastructure capital matters for labor productivity in China, at the regional level as well as over time. This paper estimates cost function models of production in industrial enterprises, using province-level data from 1993 to 2003. The estimated rate of return in industrial production is 23–25%, and on average public infrastructure contributes 2–3% points to the growth in labor productivity among these enterprises.     

Comparisons of agricultural productivity growth in China and India

We measure and compare agricultural total factor productivity (TFP) growth and its components (efficiency and technical change) in China and India and test the TFP series for the existence of structural breaks relating the evolution of TFP to policy milestones. Our results show that agricultural TFP growth accelerates in China after 1979 and in India after 1974, although China’s agricultural sector clearly outperforms India’s. The main explanation of these differentials is that agricultural growth in China benefited from more fundamental institutional and policy reforms in agriculture than India. There is some evidence that the transformation of industry in China was also important for agricultural TFP growth. Manufacture growth absorbed labor and reduced employment in agriculture, creating incentives for capital investment and technical change that kept output per worker in agriculture growing at high rates. Fewer changes in agricultural policies and in the dynamics of manufacturing in India resulted in slower growth in agricultural productivity, despite policy changes that accelerated economic growth in recent years.     

Location choice for direct foreign investment in new hospitals in China by using ANP and TOPSIS

This study models location choices for foreign direct investments in new hospitals in China as an multi-criteria decision-making (MCDM) problem and designs develops a multidirectional relationship decision model combines the techniques of analytic network process (ANP) and technique for order performance based on similarity to the ideal solution (TOPSIS). This study discusses applying ANP to the relative weighting of multiple assessment criteria. The TOPSIS approach is employed to rank 15 counties without the Zhoushan of China’s Yangtze River Delta (YRD) region in terms of their overall performance under the decision model. To illustrate how the proposed approach is applied to the problem of selecting locations for new hospitals in China an empirical study of a real case is performed. This study demonstrates the effectiveness and feasibility of the proposed assessment procedure.     

Does Trade Liberalization Cause a Long Run Economic Growth in Turkey

Based on ‘endogenous’ growth theory, the paper examines the effect of trade liberalization on long-run income per capita and economic growth in Turkey. Although the presumption must be that free trade has a beneficial effect on long run growth, counter examples can also be found. This controversy increases the importance of empirical work in this area. Using the most recent data we employ multivariate cointegration analysis to test the long run relationship among the variables in hand. In a multivariate context, the effect of determinants such as increasing returns to scale, investment in human and physical capital are also included in both theoretical and empirical works. Our causality evidence between the long run growth and a number of indicators of trade liberalizations confirms the predictions of the ‘new growth theory’. However, the overall effect of the possible breaks and/or policy change and unsustainability in the 1990s looks contradictory and deserves further investigation.     

Sources of Structural Change and Output Growth of China's Economy: 1987-92

This paper examines the sources of structural changes in output growth of China’s economy over 1987–92 using a decomposition method within the input-output (IO) framework. The model uses three comparable IO tables of 1987, 1990, and 1992 as the main data sources; it accounts for output changes from a demand side perspective and decomposes the growth of output into consumption demand, investment demand, export, import, and intermediate use (indicated by changes in IO coefficients). Special attention is given to identifying the effects of government policies on economic growth and structural change. It is found that overall output growth was multi-components driven rather than single-factor led; the share of the contribution to output growth from consumption and investment expansion declined and that from export and import increased. Whilst the efficiency of factor utilisation remains an issue of further research, a remarkable rise in IO coefficient share indicates a deepening and strong interdependence between industrial sectors over the data period. This revised version was published online in July 2006 with corrections to the Cover Date.     

金融发展、FDI技术溢出与中国经济增长——基于省际面板数据的实证分析

基于1990年-2008年中国省际面板数据,就金融发展水平决定的FDI溢出效应对中国经济增长影响的实证研究表明,样本期内FDI通过其资本积累效应,对中国经济增长产生了显著的促进作用,且这一作用有随时间而强化的趋势;金融发展具有放大FDI技术溢出效应的作用,并由此对中国经济增长产生正面影响,但目前来看这一影响还比较小;"金融抑制"现象依然存在并对中国经济增长产生了不利影响,但在经历了多年的金融体制改革之后,"金融抑制"现象已有所减轻,其对经济增长的负面影响趋于减弱。     

Quantitative and Dynamic Analysis of the Oli Variables Determining Fdi in China

The main determinants of foreign direct investment in China are analyzed quantitatively and dynamically based on Dunning's eclectic theory and empirical models corresponding to location-specific advantages, ownership-specific advantages and internalization advantage. More specifically, the correlation between each OLI variable and FDI is tested and explained in detail. It is concluded that monopolistic advantages of technology and management experience of foreign investors along with China's low labor cost and great market potential might be important factors attracting FDI in China. In addition, using an internal market to establish a network of international production might also be an important determinant for foreigners to directly invest in China. Others might include searching for attractive yields available in equity investment, devaluation of the Chinese currency, distance, culture and global business strategies.     

Foreign direct investment: A genetic algorithm approach

This paper proposes a genetic algorithm (GA) approach as an analytical tool with a carefully defined fitness function for variable selection. Discriminant analysis will be used as a parameter evaluation method for the analysis of inward foreign direct investment (FDI) in China. Results indicate that the proposed GA method is more efficient in classifying “successful or unsuccessful” inward FDI by providing higher accuracy rates while using fewer variables than previous efforts. An implication of this result is that, given a scarcity of resources and the need to promote FDI, the proposed GA may provide a more efficient way to concentrate on those fewer variables found to be important determinants of “successful” FDI inflow.     

Foreign direct investment and its determinants: A regional panel causality analysis

Moving beyond traditional one- or possibly two-way causality involving foreign direct investment (FDI), a systematic approach is implemented for delineating both short- and long-run flows of causality involving FDI and a comprehensive set of FDI's possible determinants. Granger causality procedures incorporating error correction terms are implemented, using provincial panel data from China. In both the short and long run, growth in GDP directly influences FDI, while growth in local infrastructure and local investment provide indirect but not direct influence.     

Do universities knowledge spillovers impact on new firm’s growth? Empirical evidence from UK

The paper explores the effect of scientific institutions on firm’s growth, coupling regional science and entrepreneurship approaches. We focus on the role of universities, largely considered in the literature as the main source of knowledge spillovers. To this purpose, we centre our attention on UK public companies on the Alternative Investment Market (AIM), a market dedicated to young and growing companies in both science and non-science based industries. In the paper we investigate the growth determinants of 231 listed firms which have gone public during the period going from 1995 to 2006. To our purposes, in the empirical analysis we use the Gibrat’s Law of Proportionate Effects model. The results supports the hypothesis that, controlling for firm’s idiosyncratic factors and external forces, both universities knowledge input and output are important determinants of the growth of entrepreneurial firms listed on the AIM.

外商直接投资的环境效应测度——基于省际面板数据的实证研究

外商直接投资对中国经济增长的贡献作用非常显著,但随着外商直接投资规模的不断扩大,其带来的环境效应也十分明显。以中国30个省份面板数据为基础的实证研究结果显示,外商直接投资对我国东中西部地区造成环境污染的程度有较大差异。从统计上看,外商直接投资与环境管制力度之间存在着显著的关系,中西部地区引进外商直接投资的数额随着环境管制力度的增强而显著减少。     

STRUCTURAL CHANGE AND GROWTH IN CHINA UNDER ECONOMIC REFORMS: PATTERNS,CAUSES AND IMPLICATIONS

This paper investigates the patterns, causes, and implications of China's structural change and its contribution to China's regional growth. Among many other findings, our regression results show that conditional convergence exists across different regions in China. Regional structural change has a convergence effect and regional openness facilitates regional structural change. Structural shocks and structural transformation had the opposite effect on China's interregional convergence during the 1990s, though the combined effect of overall structural change is a convergence effect. We also find that Chinese regions rely more heavily on structural change for labor productivity growth as the economy evolves. In summary, the results of our empirical analysis support the hypothesis underlying the theoretical model of this paper.     

技术差距的门槛与FDI技术溢出的非线性——理论模型及中国企业的实证研究

本文通过引入内外资技术差距的"双刃性"改进质量阶梯型内生增长模型,从理论上证明了存在内外资技术差距的门槛值,使得外商直接投资技术溢出受技术差距的影响而呈现非线性动态演进规律;进一步结合我国14474家微观企业面板数据,证明了存在两个技术差距的门槛值,使得外商直接投资企业对于落在不同技术差距范围内的内资企业具有不同的技术溢出效应。     

Influences on students attitudes toward entrepreneurship: A multi-country study

Entrepreneurship has been emphasized in many countries as a way of boosting economic growth and job creation. As entrepreneurship is becoming popular around the world, its education should be customized according to each country’s unique cultural context. The purpose of this paper is to identify differences among the selected nations in terms of factors that are important to enhance the pedagogical effect of entrepreneurship education. This is an empirical study based on the data collected from university students in the US, Korea, China and Fiji representing nations with significantly different cultural contexts. The results imply that customized approaches based on unique cultural context are needed for effective entrepreneurship education in each country.     

Foreign direct investment and productivity spillovers in the Chinese manufacturing sector

In this paper a simple simultaneous model is constructed to examine whether there are productivity spillovers from both the presence of foreign direct investment (FDI) and competition between local and foreign firms. The model is tested on the data from China’s latest industrial census in 1995. The results indicate that the extent to which spillovers occur varies with different types of ownership of local firms and of FDI. While collective- and private-owned enterprises benefit from demonstration and contagion effects from foreign presence, productivity gains of state-owned enterprises largely come from competition with foreign firms. Productivities of local and foreign firms are jointly determined. Evidence also suggests that market-oriented FDI tends to generate spillovers mainly via competition with local firms.     

Entrepreneurship,income distribution and economic growth

Traditionally different factors and variables have been considered in the economic growth models. Following Solow’s model, economists considered physical capital and technology during 1950s–1980s. With the introduction of endogenous growth models, new forms of capital were introduced in the production function; human capital, public capital and more recently social capital. However, the consideration of qualitative variables is necessary to improve the economic growth analysis. The improvement of statistical information has favored their introduction in the economic growth models. Recently, “entrepreneurship” concept has been considered in this type of analysis. Entrepreneurship considers the capacity and ability to create new business and production activity. It is an activity not an occupation. Some authors like Schumpeter have included it in their models and they have analysed its effects on economic growth. But it is also necessary to include the role of social climate, that in a schumpterian way it could be represented by income distribution. The main objective of the paper is to analyze the relationship between entrepreneurship, income distribution and economic growth following the ideas developed by Schumpeter and we will contrast them from a empirical analysis using the GEM (Global Entrepreneurship Monitor) data.     

从FCF看中国外贸均衡发展

全球经济危机迫使中国经济降低了对国外市场的依赖程度。制造业也同样必须适应国际需求的变化。外国子公司的加工出口容易受到西方需求放缓的影响,而中国的出口企业却在转型进入活跃的新兴市场中处于有利地位。同时,中国的一般进口正日益增长。亚洲国家扩大了其国内市场的份额,欧洲国家也留有强势地位,而北美国家却失去了自己的市场。中国成为了区域经济增长的动力。在中国的进口及工业生产中,外资企业起到了越来越重要的作用。中国对外国直接投资的政策与确定外国伙伴进入其国内市场的汇率政策至少是同等重要的。