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China's Capital and Productivity Measurement Using Financial Resources

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  • Kui-Wai Li

Abstract

This paper constructs China's capital stock, which is used in conjunction with a labor variable to estimate a Cobb-Douglas production function for the Chinese economy. Two panels of data are used one for capital formation and one for sources of investment finance. Both national and provincial data are used for these two panels, thus giving a total of four capital-stock series. The Cobb-Douglas estimates show that China's total factor productivity was about 3.4 percent in the post-reform years. Productivity of coastal provinces is higher than inner provinces. Among the various sources of investment finance, foreign direct investment is more efficient than state-funded capital stock.

Suggested Citation

  • Kui-Wai Li, 2003. "China's Capital and Productivity Measurement Using Financial Resources," Working Papers 851, Economic Growth Center, Yale University.
  • Handle: RePEc:egc:wpaper:851
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    References listed on IDEAS

    as
    1. Jefferson, Gary H. & Rawski, Thomas G. & Zheng, Yuxin, 1996. "Chinese Industrial Productivity: Trends, Measurement Issues, and Recent Developments," Journal of Comparative Economics, Elsevier, vol. 23(2), pages 146-180, October.
    2. Jefferson, Gary H. & Rawski, Thomas G. & Li, Wang & Yuxin, Zheng, 2000. "Ownership, Productivity Change, and Financial Performance in Chinese Industry," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 786-813, December.
    3. Gregory C. Chow, 1993. "Capital Formation and Economic Growth in China," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 809-842.
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    More about this item

    Keywords

    China economic reform; provincial growth and productivity; financial resources;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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