Chinese Rural Industrial Productivity and Urban Spillovers
AbstractChinese rural industry has grown three times faster than national GDP, surpassing agriculture in size in 1987, and now nearing half of the total Chinese economy. We use a rich, new county-level data set to explore this dramatic growth. We find that a Cobb-Douglas production function explains over 80 percent of across-county variation in 1991 rural industrial output per capita, with little role for idiosyncratic regional or provincial fixed effects. There is a very large effect on productivity from being near cities (30 to 35 percent higher productivity for a county one standard deviation above average in nearness to population centers) due to embodied technology transfer from urban residents. We find strong support for the hypothesis that saving from past agricultural income has provided start-up capital for rural enterprises. However, higher land-labor ratios lead to greater allocation of labor and capital to agriculture instead of industry, although induced inflow of migrants reduces the effect on industrial labor. Nearness to cities and more education increase capital and labor in rural industry. Substantial explanatory power (one third or more) for industrial labor and capital is attributed to provincial fixed effects, possibly reflecting local commercial and migration policies.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6202.
Date of creation: Sep 1997
Date of revision:
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Knight, J. & Song, L., 1990.
"The Spatial Contribution To Income Inequality In Rural China,"
Economics Series Working Papers
99106, University of Oxford, Department of Economics.
- Knight, John & Song, Lina, 1993. "The Spatial Contribution to Income Inequality in Rural China," Cambridge Journal of Economics, Oxford University Press, vol. 17(2), pages 195-213, June.
- Jeffrey D. Sachs & Wing Thye Woo, .
"Understanding China'S Economic Performance,"
Department of Economics
97-04, California Davis - Department of Economics.
- Jeffrey D. Sachs & Wing Thye Woo, 1997. "Understanding China's Economic Performance," Harvard Institute of Economic Research Working Papers 1793, Harvard - Institute of Economic Research.
- Jeffrey D. Sachs & Wing Thye Woo, 1997. "Understanding China's Economic Performance," NBER Working Papers 5935, National Bureau of Economic Research, Inc.
- Kenneth L. Sokoloff & Viken Tchakerian, 1997.
"Manufacturing Where Agriculture Predominates: Evidence from the South and Midwest in 1860,"
NBER Historical Working Papers
0100, National Bureau of Economic Research, Inc.
- Sokoloff, Kenneth L. & Tchakerian, Viken, 1997. "Manufacturing Where Agriculture Predominates: Evidence from the South and Midwest in 1860," Explorations in Economic History, Elsevier, vol. 34(3), pages 243-264, July.
- Zucker, Lynne G & Darby, Michael R & Brewer, Marilynn B, 1998. "Intellectual Human Capital and the Birth of U.S. Biotechnology Enterprises," American Economic Review, American Economic Association, vol. 88(1), pages 290-306, March.
- Michael R. Darby & Lynne G. Zucker, 1996. "Star Scientists, Institutions, and the Entry of Japanese Biotechnology Enterprises," NBER Working Papers 5795, National Bureau of Economic Research, Inc.
- Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
- Zucker, Lynne G & Darby, Michael R & Armstrong, Jeff, 1998. "Geographically Localized Knowledge: Spillovers or Markets?," Economic Inquiry, Western Economic Association International, vol. 36(1), pages 65-86, January.
- Lynne G. Zucker & Michael R. Darby & Yusheng Peng, 1998. "Fundamentals or Population Dynamics and the Geographic Distribution of U.S. Biotechnology Enterprises, 1976-1989," NBER Working Papers 6414, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.