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What Effect does the Size of the State-Owned Sector Have on Regional Growth in China?

  • Kerk L. Phillips

    (Brigham Young University)

  • Shen Kunrong

    (Nanjing University)

This abstract will be reformatted upon submission. You don't need to format for line-breaks here!!!!! This paper tests the contributions of the size of state-owned enterprises as a determinant of China’s economic growth. The methodology is discussed in papers by Levine and Renelt (1992) and Sala-i-Martin (1997). We estimate regressions with growth of output and total factor productivity as the dependent variable and a variety of other factors, including measures of the size of the state-run sector, as regressors. We find that controlling for a variety of other factors, the greater the importance of state owned enterprises, as measured by the proportion of total industrial production they produce, the lower the provincial growth rate. The average estimate is that a decrease in the SOE share of industrial production by ten percentage points increases real GDP growth the following year by 1.14%. The average impacts of a reduction in the SOE share in employment are smaller in absolute magnitude and different for large provinces than they are for small ones. Large provinces actually have higher growth rates if this share rises, while smaller provinces have higher growth rates when it falls.

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File URL: http://econwpa.repec.org/eps/dev/papers/0304/0304006.pdf
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Paper provided by EconWPA in its series Development and Comp Systems with number 0304006.

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Length: 21 pages
Date of creation: 16 Apr 2003
Date of revision:
Handle: RePEc:wpa:wuwpdc:0304006
Note: Type of Document - PDF; pages: 21; figures: included/request from author/draw your own
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  1. Johnson, Paul, 1999. "A Nonparametric Analysis of Income Convergence Across the US States," Vassar College Department of Economics Working Paper Series 46, Vassar College Department of Economics.
  2. Chow, G.C., 1990. "Capital Formation And Economic Growth In China," Papers 356, Princeton, Department of Economics - Econometric Research Program.
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  4. Xavier X. Sala-i-Martin, 1997. "I Just Ran Four Million Regressions," NBER Working Papers 6252, National Bureau of Economic Research, Inc.
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  13. Liu, Tung & Li, Kui-Wai, 2001. "Impact of liberalization of financial resources in China's economic growth: evidence from provinces," Journal of Asian Economics, Elsevier, vol. 12(2), pages 245-262.
  14. Paul Cashin & Ratna Sahay, 1995. "Internal Migration, Center-State Grants and Economic Growth in the States of India," IMF Working Papers 95/66, International Monetary Fund.
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  17. Leamer, Edward E, 1985. "Sensitivity Analyses Would Help," American Economic Review, American Economic Association, vol. 75(3), pages 308-13, June.
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