IDEAS home Printed from https://ideas.repec.org/a/taf/repsxx/v1y2013i2p18-39.html
   My bibliography  Save this article

Collusion and Economic Growth: A New Perspective on the China Model

Author

Listed:
  • Nie Huihua
  • Jinbo Li

Abstract

In this paper we propose a political-economy model of China that explains both the rapid economic growth frequent rate of accidents that have occurred in China. The central government delegates authority to the local government to regulate the production activities of the firm. Under information asymmetry the local government can collude with the firm choose “bad” technology the use of which will lead to faster economic growth more accidents than the use of “good” technology. We characterize optimal equilibrium within collusion contracts under which the central government will allow collusion when the cost to eliminate collusion is high. We also characterize the optimal collusion-proof contract under which the payments reprimands taxes that take place between the local government the firm are endogenously determined. Our predictions on collusion growth are supported by an empirical study on the coal industry.

Suggested Citation

  • Nie Huihua & Jinbo Li, 2013. "Collusion and Economic Growth: A New Perspective on the China Model," Economic and Political Studies, Taylor & Francis Journals, vol. 1(2), pages 18-39, July.
    • Handle: RePEc:taf:repsxx:v:1:y:2013:i:2:p:18-39
    DOI: 10.1080/20954816.2013.11673858
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/20954816.2013.11673858
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/20954816.2013.11673858?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    Citations

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


    Cited by:

    1. Limei Ma & Qianying Wang & Dan Shi & Qinglong Shao, 2023. "Spatiotemporal patterns and determinants of renewable energy innovation: Evidence from a province-level analysis in China," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.
    2. Pi‐Han Tsai & Yongzheng Liu & Xin Liu, 2021. "Collusion, political connection, and tax avoidance in China," Kyklos, Wiley Blackwell, vol. 74(3), pages 417-441, August.
    3. Yuan Qiu & Di Zhou, 2024. "De‐politicization and corporate social responsibility: Empirical evidence from China," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(4), pages 3668-3684, July.
    4. Zhou, Mengling & Wang, Bing & Chen, Zhongfei, 2020. "Has the anti-corruption campaign decreased air pollution in China?," Energy Economics, Elsevier, vol. 91(C).

    More about this item

    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:taf:repsxx:v:1:y:2013:i:2:p:18-39. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/reps .

    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.