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Industrial policy, production efficiency improvement and the Chinese county economic growth

Author

Listed:
  • Wang Zhenhua

    (College of Economics and Management, Shenyang Agricultural University, Shenyang, China)

  • Zhang Guangsheng

    (College of Economics and Management, Shenyang Agricultural University, Shenyang, China)

Abstract

This study aims at analyzing the difference in the level of economic development between China’s counties from the two perspectives of industrial policy and production efficiency. Based on panel data of 1830 Chinese counties, this study employs the new classical economic growth theory framework to analyze the counties’ economic growth by the perpetual inventory method, Malmquist index, among others. The results show that the economy of the counties exhibits ? convergence since 2004, and the absolute differences in the different counties are expanding. Industrial policy ensures the additional deepening of the level of capital in the county. Additionally, a substantial difference was observed between the agricultural sector and the non-agricultural sector, whereby the total factor productivity and the technical efficiency are on the rise, resulting in the phenomenon of dual paths of technological progress. In summary, the capital deepening difference between the sectors, production efficiency, and dual paths of technological progress owing to the counties’ industrial policy are the basic reasons for the regional differences in the level of economic development in China.

Suggested Citation

  • Wang Zhenhua & Zhang Guangsheng, 2016. "Industrial policy, production efficiency improvement and the Chinese county economic growth," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 34(2), pages 505-528.
    • Handle: RePEc:rfe:zbefri:v:34:y:2016:i:2:p:505-528
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    References listed on IDEAS

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    Cited by:

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    2. R.A Zhukov, 2021. "Assessment of the Balanced Functioning of Hierarchical Socio-Economic Systems," Journal of Applied Economic Research, Graduate School of Economics and Management, Ural Federal University, vol. 20(1), pages 84-109.

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    More about this item

    Keywords

    county economy; ? convergence; industrial policy; dual paths of technological progress;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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