Using A Trade-induced Catch-up Model to Explain China's Provincial Economic Growth 1978-97
AbstractThis paper attempts to make an innovative contribution to the growth literature by proposing a trade-induced catch up model in which imitation benefit is explicitly modelled and trade knowledge spillover is considered. The resulting income dynamics is in the error correction form. The Pooled Mean Group dynamic heterogeneous panel data estimator (Pesaran and Shin, 1997) is used to empirically implement the error correction catch-up dynamics. The application is to China's provinces during the reform period 1978-97. The main findings are: there is a positive long-run relationship among per capita GDP, per capita capital and per capita trade, which can account for China's economic growth miracle during the last two decades. Moreover, the trade knowledge spillover benefits disproportionately to individual provinces and thus cause significant differences of growth growth across the provinces.
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Bibliographic InfoPaper provided by Stockholm School of Economics in its series Working Paper Series in Economics and Finance with number 0435.
Length: 41 pages
Date of creation: 22 Feb 2001
Date of revision:
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Growth; dynamic panel;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
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