Nonlinear investigations of China's agricultural transformation based on the structural break regime switching model
Purpose - Investigating the characteristics of the transformation of China's agricultural growth and the institutional reforms during the whole transition period in the 1980s will help to understand China's economic and agricultural reform and offer some successful experiences to other developing countries. The purpose of this paper is to answer the following questions: Has China's agricultural output experienced a structural break toward a more stable state? When did the break point happen? What factors did play key roles during the transformation? Design/methodology/approach - This study applies the nonlinear structural break regime switching analysis which includes two different models: one with the structural break only in the variance and one with the structural break in both shift parameters and the variance. Findings - The empirical results showed that it took five years for agricultural development in China to finish the reform that began in 1980. The agricultural growth had become more stable after the break point which was around 1985-1986. Both the primary industry and agricultural sector had transformed from a “low growth rate, high volatility” state to a “high growth rate, low volatility” state. Among the different driving factors, the Household Responsibility System (HRS) and preferential policies for agricultural products played the most important roles in the early stage of the economic reform. Originality/value - The authors first study the structural break of China's agricultural output by the regime switching model. From the empirical results, the structural break point was determined to be around 1985-1986, after which China's agricultural output had become more stable.
Volume (Year): 4 (2012)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://www.emeraldinsight.com/caer.htm Email:
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.:
- McMillan, John & Naughton, Barry, 1992. "How to Reform a Planned Economy: Lessons from China," Oxford Review of Economic Policy, Oxford University Press, vol. 8(1), pages 130-143, Spring.
- Hansen, Bruce E, 1992. "The Likelihood Ratio Test under Nonstandard Conditions: Testing the Markov Switching Model of GNP," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 7(S), pages 61-82, Suppl. De.
- Eric Girardin, 2005. "Growth-cycle features of East Asian countries: are they similar?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 10(2), pages 143-156.
- Vadim Marmer, 2008.
"Testing the null hypothesis of no regime switching with an application to GDP growth rates,"
Springer, vol. 35(1), pages 101-122, August.
- Marmer, Vadim, 2009. "Testing the null hypothesis of no regime switching with an application to GDP growth rates," Microeconomics.ca working papers vadim_marmer-2009-59, Vancouver School of Economics, revised 03 Nov 2009.
- Fan, Shenggen, 1997. "Production and productivity growth in Chinese agriculture: new measurement and evidence," Food Policy, Elsevier, vol. 22(3), pages 213-228, June.
- Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
- ROZELLE, Scott & SWINNEN, Johan F.M., 2009. "Why did the communist party reform in China, but not in the Soviet Union? The political economy of agricultural transition," China Economic Review, Elsevier, vol. 20(2), pages 275-287, June.
- Terence C. Mills & Ping Wang, 2003. "Have output growth rates stabilised? evidence from the g-7 economies," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(3), pages 232-246, August.
- McMillan, John & Whalley, John & Zhu, Lijing, 1989. "The Impact of China's Economic Reforms on Agricultural Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 97(4), pages 781-807, August.
- Huang, Jikun & Rozelle, Scott, 1996. "Technological change: Rediscovering the engine of productivity growth in China's rural economy," Journal of Development Economics, Elsevier, vol. 49(2), pages 337-369, May.
- Scott Rozelle & Johan F.M. Swinnen, 2004. "Success and Failure of Reform: Insights from the Transition of Agriculture," Journal of Economic Literature, American Economic Association, vol. 42(2), pages 404-456, June.
- Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-384, March.
- Gérard Roland, 2002. "The Political Economy of Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 29-50, Winter.
- Mead, Robert W., 2000. "China's agricultural reforms: The importance of private plots," China Economic Review, Elsevier, vol. 11(1), pages 54-78.
- Sugita, Katsuhiro, 2008. "Bayesian analysis of a Markov switching temporal cointegration model," Japan and the World Economy, Elsevier, vol. 20(2), pages 257-274, March. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eme:caerpp:v:4:y:2012:i:1:p:52-68. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Virginia Chapman)
If references are entirely missing, you can add them using this form.