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Disparity in Factor Contributions between Coastal and Inner Provinces in Post-reform China

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  • Tung Liu

    () (Department of Economics, Ball State University)

  • Kui-Wai Li

    () (City University of Hong Kong, Hong Kong SAR)

Abstract

The paper discusses China’s post-reform regional economic growth imbalance relative to input disparity in technology, physical and human capital. Institutional sources of finance and types of ownership are used to construct physical capital. Technology is measured by investment in innovation, and human capital is constructed from schooling years per capita. The results show that domestic bank loans and foreign-owned enterprises are important in coastal provinces, while state appropriation and state-owned enterprises are important in inner provinces. Technology and foreign investment have a larger impact on output growth in coastal provinces. Human capital is endogenous for coastal provinces, but is exogenous for inner provinces.

Suggested Citation

  • Tung Liu & Kui-Wai Li, 2005. "Disparity in Factor Contributions between Coastal and Inner Provinces in Post-reform China," Working Papers 200502, Ball State University, Department of Economics, revised Apr 2006.
  • Handle: RePEc:bsu:wpaper:200502
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    Cited by:

    1. Zhou, Xianbo & Li, Kui-Wai & Li, Qin, 2011. "An analysis on technical efficiency in post-reform China," China Economic Review, Elsevier, vol. 22(3), pages 357-372, September.
    2. Yang, Ling & Lahr, Michael L., 2008. "Labor Productivity Differences in China 1987-1997: An Interregional Decomposition Analysis," The Review of Regional Studies, Southern Regional Science Association, vol. 38(3), pages 319-341.
    3. Kui-Wai Li & Tung Liu & Lihong Yun, 2007. "Technology Progress, Efficiency, and Scale of Economy in Post-reform China," Working Papers 200701, Ball State University, Department of Economics, revised Apr 2007.
    4. Huimin Xu & Hutao Yang & Xi Li & Huiran Jin & Deren Li, 2015. "Multi-Scale Measurement of Regional Inequality in Mainland China during 2005–2010 Using DMSP/OLS Night Light Imagery and Population Density Grid Data," Sustainability, MDPI, Open Access Journal, vol. 7(10), pages 1-31, September.
    5. Rui HAO & Zheng WEI, 2009. "Sources Of Income Differences Across Chinese Provinces During The Reform Period: A Development Accounting Exercise," The Developing Economies, Institute of Developing Economies, vol. 47(1), pages 1-29.
    6. Guillaumont Jeanneney, Sylviane & Hua, Ping, 2011. "How does real exchange rate influence labour productivity in China?," China Economic Review, Elsevier, vol. 22(4), pages 628-645.
    7. Rui Hao & Zheng Wei, 2010. "Fundamental causes of inland–coastal income inequality in post-reform China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(1), pages 181-206, August.
    8. Yang, Ling & Lahr, Michael/L, 2008. "Interregiona;Decomposition of labor productivity differences in China, 1987-1997," MPRA Paper 8313, University Library of Munich, Germany.
    9. Li, Kui-Wai & Liu, Tung, 2011. "Economic and productivity growth decomposition: An application to post-reform China," Economic Modelling, Elsevier, vol. 28(1-2), pages 366-373, January.
    10. Horridge, Mark & Wittwer, Glyn, 2008. "SinoTERM, a multi-regional CGE model of China," China Economic Review, Elsevier, vol. 19(4), pages 628-634, December.
    11. Liu, Tung & Li, Kui-Wai, 2012. "Analyzing China's productivity growth: Evidence from manufacturing industries," Economic Systems, Elsevier, vol. 36(4), pages 531-551.
    12. Li, Kui-Wai, 2009. "China's total factor productivity estimates by region, investment sources and ownership," Economic Systems, Elsevier, vol. 33(3), pages 213-230, September.
    13. Li, Kui-Wai, 2015. "Analyzing the TFP Performance of Chinese Industrial Enterprises," MPRA Paper 67844, University Library of Munich, Germany.
    14. Kui-Wai Li & Tung Liu & Lihong Yun, 2008. "Decomposition of Economic and Productivity Growth in Post-reform China," Working Papers 200806, Ball State University, Department of Economics, revised Dec 2008.
    15. Yuheng Li & Xun Wang & Hans Westlund & Yansui Liu, 2015. "Physical Capital, Human Capital, and Social Capital: The Changing Roles in China's Economic Growth," Growth and Change, Wiley Blackwell, vol. 46(1), pages 133-149, March.
    16. Li, Tingting & Lai, Jennifer T. & Wang, Yong & Zhao, Dingtao, 2016. "Long-run relationship between inequality and growth in post-reform China: New evidence from dynamic panel model," International Review of Economics & Finance, Elsevier, vol. 41(C), pages 238-252.

    More about this item

    Keywords

    Mainland China; regional disparity; physical and human capital; productivity;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P24 - Economic Systems - - Socialist Systems and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation

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