IDEAS home Printed from https://ideas.repec.org/a/eee/chieco/v17y2006i4p449-470.html
   My bibliography  Save this article

Disparity in factor contributions between coastal and inner provinces in post-reform China

Author

Listed:
  • Liu, Tung
  • Li, Kui-Wai

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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Liu, Tung & Li, Kui-Wai, 2006. "Disparity in factor contributions between coastal and inner provinces in post-reform China," China Economic Review, Elsevier, vol. 17(4), pages 449-470.
    • Handle: RePEc:eee:chieco:v:17:y:2006:i:4:p:449-470
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1043-951X(06)00047-2
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    2. Dees, Stephane, 1998. "Foreign Direct Investment in China: Determinants and Effects," Economic Change and Restructuring, Springer, vol. 31(2-3), pages 175-194.
    3. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
    4. Li, Kui-Wai, 2003. "China's Capital and Productivity Measurement Using Financial Resources," Center Discussion Papers 28469, Yale University, Economic Growth Center.
    5. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 407-437.
    6. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(4), pages 1091-1135.
    7. W, Y, 1995. "Productivity Growth, Technological Progress, and Technical Efficiency Change in China: A Three-Sector Analysis1," Journal of Comparative Economics, Elsevier, vol. 21(2), pages 207-229, October.
    8. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    9. Dwight H. Perkins, 1994. "Completing China's Move to the Market," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 23-46, Spring.
    10. Davidson, Russell & MacKinnon, James G., 1989. "Testing for Consistency using Artificial Regressions," Econometric Theory, Cambridge University Press, vol. 5(3), pages 363-384, December.
    11. Holz, Carsten A., 2004. "Deconstructing China's GDP statistics," China Economic Review, Elsevier, vol. 15(2), pages 164-202.
    12. S. Yao & Z. Zhang, 2001. "Regional Growth in China Under Economic Reforms," Journal of Development Studies, Taylor & Francis Journals, vol. 38(2), pages 167-186.
    13. Rawski, Thomas G. & Xiao, Wei, 2001. "Roundtable on Chinese Economic Statistics Introduction," China Economic Review, Elsevier, vol. 12(4), pages 298-302.
    14. Kui-Wai Li, 1997. "Money and monetization in China's economic reform," Applied Economics, Taylor & Francis Journals, vol. 29(9), pages 1139-1146.
    15. Nazrul Islam, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 1127-1170.
    16. Lin, Justin Y & Wang, Gewei & Zhao, Yaohui, 2004. "Regional Inequality and Labor Transfers in China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 587-603, April.
    17. Fleisher, Belton M. & Chen, Jian, 1997. "The Coast-Noncoast Income Gap, Productivity, and Regional Economic Policy in China," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 220-236, October.
    18. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    19. Yang, Dennis Tao, 2002. "What has caused regional inequality in China?," China Economic Review, Elsevier, vol. 13(4), pages 331-334, December.
    20. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    21. Cai, Fang & Wang, Dewen & Du, Yang, 2002. "Regional disparity and economic growth in China: The impact of labor market distortions," China Economic Review, Elsevier, vol. 13(2-3), pages 197-212.
    22. Carsten A. Holz, 2004. "China's Statistical System in Transition: Challenges, Data Problems, and Institutional Innovations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 50(3), pages 381-409, September.
    23. Zvi Griliches, 1973. "Research Expenditures and Growth Accounting," International Economic Association Series, in: B. R. Williams (ed.), Science and Technology in Economic Growth, chapter 3, pages 59-95, Palgrave Macmillan.
    24. Borensztein, Eduardo & Ostry, Jonathan D, 1996. "Accounting for China's Growth Performance," American Economic Review, American Economic Association, vol. 86(2), pages 224-228, May.
    25. Gregory C. Chow, 1993. "Capital Formation and Economic Growth in China," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 809-842.
    26. Wu Yanrui, 1994. "Productivity Growth, Technological Progress and Technical Efficiency Change in China: A Three-Sector Analysis," Chinese Economies Research Centre (CERC) Working Papers 1994-05, University of Adelaide, Chinese Economies Research Centre.
    27. Ajit S. Bhalla & Shujie Yao & Zongyi Zhang, 2003. "Causes of inequalities in China, 1952 to 1999," Journal of International Development, John Wiley & Sons, Ltd., vol. 15(8), pages 939-955.
    28. Alwyn Young, 2003. "Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1220-1261, December.
    29. Xu, Xinpeng, 2002. "Have the Chinese provinces become integrated under reform?," China Economic Review, Elsevier, vol. 13(2-3), pages 116-133.
    30. Chang, Gene H., 2002. "The cause and cure of China's widening income disparity," China Economic Review, Elsevier, vol. 13(4), pages 335-340, December.
    31. Shujie Yao & Zongyi Zhang & Gengfu Feng, 2005. "Rural-urban and regional inequality in output, income and consumption in China under economic reforms," Journal of Economic Studies, Emerald Group Publishing, vol. 32(1), pages 4-24, January.
    32. Lee, Kevin & Pesaran, M Hashem & Smith, Ron, 1997. "Growth and Convergence in Multi-country Empirical Stochastic Solow Model," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(4), pages 357-392, July-Aug..
    33. 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.
    34. Wan, Guanghua, 2004. "Accounting for income inequality in rural China: a regression-based approach," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 348-363, June.
    35. repec:bla:ecorec:v:78:y:2002:i:243:p:375-80 is not listed on IDEAS
    36. Alwyn Young, 2000. "The Razor's Edge: Distortions and Incremental Reform in the People's Republic of China," NBER Working Papers 7828, National Bureau of Economic Research, Inc.
    37. Perkins, Dwight Heald, 1988. "Reforming China's Economic System," Journal of Economic Literature, American Economic Association, vol. 26(2), pages 601-645, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:rre:publsh:v:38:y:2008:i:3:p:319-41 is not listed on IDEAS
    2. 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.
    3. Chih-HAI YANG & Leah WU & Hui-Lin LIN, 2010. "Analysis of total-factor cultivated land efficiency in China's agriculture," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 56(5), pages 231-242.
    4. 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, March.
    5. Horridge, Mark & Wittwer, Glyn, 2008. "SinoTERM, a multi-regional CGE model of China," China Economic Review, Elsevier, vol. 19(4), pages 628-634, December.
    6. Kui-Wai Li, 2018. "Analyzing The Tfp Performance Of Chinese Industrial Enterprises," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 63(05), pages 1263-1284, December.
    7. Li, Kui-Wai & Liu, Tung, 2011. "Economic and productivity growth decomposition: An application to post-reform China," Economic Modelling, Elsevier, vol. 28(1), pages 366-373.
    8. 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.
    9. 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.
    10. 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.
    11. Yang, Ling & Lahr, Michael/L, 2008. "Interregiona;Decomposition of labor productivity differences in China, 1987-1997," MPRA Paper 8313, University Library of Munich, Germany.
    12. Shufeng Simon Xiao & Yong Kyu Lew & Byung Il Park, 2019. "‘2R-Based View’ on the Internationalization of Service MNEs from Emerging Economies: Evidence from China," Management International Review, Springer, vol. 59(4), pages 643-673, August.
    13. Lim, Jinyang & Nam, Changi & Kim, Seongcheol & Lee, Euehun & Lee, Hongkyu, 2015. "A new regional clustering approach for mobile telecommunications policy in China," Telecommunications Policy, Elsevier, vol. 39(3), pages 296-304.
    14. Hong-Yul Jeong & Jong-Hag Jang, 2015. "Effects of regional development policies on the resolution of income disparity in China," Journal of Economic and Financial Studies (JEFS), LAR Center Press, vol. 3(6), pages 45-57, December.
    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. 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, vol. 7(10), pages 1-31, September.
    17. Rui Hao, 2011. "Sources of income differences across Chinese provinces during the reform period: a development accounting exercise," CERDI Working papers halshs-00557001, HAL.
    18. 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.
    19. Liu, Tung & Li, Kui-Wai, 2012. "Analyzing China's productivity growth: Evidence from manufacturing industries," Economic Systems, Elsevier, vol. 36(4), pages 531-551.
    20. 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.
    21. Diego Romero-Ávila, 2013. "Is Physical Investment The Key To China'S Growth Miracle?," Economic Inquiry, Western Economic Association International, vol. 51(4), pages 1948-1971, October.
    22. Emanuele Felice & Iacopo Odoardi & Dario D’Ingiullo, 2023. "The Chinese Inland-Coastal Inequality: The Role of Human Capital and the 2007–2008 Crisis Watershed," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(2), pages 761-788, July.
    23. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. 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.
    2. 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.
    3. Fleisher, Belton & Li, Haizheng & Zhao, Min Qiang, 2010. "Human capital, economic growth, and regional inequality in China," Journal of Development Economics, Elsevier, vol. 92(2), pages 215-231, July.
    4. Li, Kui-Wai & Liu, Tung, 2011. "Economic and productivity growth decomposition: An application to post-reform China," Economic Modelling, Elsevier, vol. 28(1), pages 366-373.
    5. Liu, Tung & Li, Kui-Wai, 2012. "Analyzing China's productivity growth: Evidence from manufacturing industries," Economic Systems, Elsevier, vol. 36(4), pages 531-551.
    6. Rui Hao, 2011. "Sources of income differences across Chinese provinces during the reform period: a development accounting exercise," CERDI Working papers halshs-00557001, HAL.
    7. 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, March.
    8. 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.
    9. Kailei Wei & Shujie Yao & Aying Liu, 2007. "Foreign direct investment and regional inequality in China," Discussion Papers 07/32, University of Nottingham, GEP.
    10. Celine Bonnefond, 2014. "Growth Dynamics And Conditional Convergence Among Chinese Provinces: A Panel Data Investigation Using System Gmm Estimator," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(4), pages 1-25, December.
    11. Lili Kang & Fei Peng, 2018. "Economic Reform and Productivity Convergence in China," Arthaniti: Journal of Economic Theory and Practice, , vol. 17(1), pages 50-82, June.
    12. Stephen Dobson & Carlyn Ramlogan & Eric Strobl, 2006. "Why Do Rates Of Β‐Convergence Differ? A Meta‐Regression Analysis," Scottish Journal of Political Economy, Scottish Economic Society, vol. 53(2), pages 153-173, May.
    13. 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.
    14. Qinghua Zhang & Heng-fu Zou, 2012. "Regional Inequality in Contemporary China," Annals of Economics and Finance, Society for AEF, vol. 13(1), pages 113-137, May.
    15. Xiaolei Qian & Russell Smyth, 2006. "Growth Accounting for the Chinese Provinces 1990-2000: Incorporating Human Capital Accumulation," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(1), pages 21-37.
    16. CHI, Wei, 2008. "The role of human capital in China's economic development: Review and new evidence," China Economic Review, Elsevier, vol. 19(3), pages 421-436, September.
    17. Groenwold, Nicolaas & Lee, Guoping & Chen, Anping, 2008. "Inter-regional spillovers in China: The importance of common shocks and the definition of the regions," China Economic Review, Elsevier, vol. 19(1), pages 32-52, March.
    18. Jinzhao Chen, 2015. "Interprovincial Competitiveness and Economic Growth: Evidence from Chinese Provincial Data (1992–2008)," Pacific Economic Review, Wiley Blackwell, vol. 20(3), pages 388-414, August.
    19. John Knight & Sai Ding, 2008. "Why has China Grown so Fast? The Role of Structural Change," Economics Series Working Papers 415, University of Oxford, Department of Economics.
    20. Jinzhao Chen, 2012. "Real Exchange Rate and Economic Growth: Evidence from Chinese Provincial Data (1992 - 2008)," PSE Working Papers halshs-00667467, HAL.

    More about this item

    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 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - National Income, Product, and Expenditure; Money; Inflation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:chieco:v:17:y:2006:i:4:p:449-470. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/chieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.