Why has China Grown So Fast? The Role of Physical and Human Capital Formation

The paper estimates cross-province growth regressions for China over the period of economic reform.� It first addresses the problem of model uncertainty by adopting two approaches to model selection, Bayesian Model Averaging and the automated General-to-Specific approach, to consider a wide range of candidate predictors of growth in China.� The first-stage model selection results identify a role for conditional convergence, physical and human capital formation, population growth, degree of openness, and institutional change.� Starting from this baseline equation, the growth impact of physical and human capital is examined in some detail using panel data system GMM.� For instance, 'investment in innovation', foreign direct investment, and private investment are found to be particularly important.� Secondary school enrolment contributes to growth, and higher education enrolment even more so.� Finally, some illustrative counterfactual predictions are conducted to answer the question: why has China, as a whole, and indeed all its provinces, grown so fast?(This abstract was borrowed from another version of this item.)