The Role Of Intangible Capital in the Transformation and Growth of the Chinese Economy

Charles R. Hulten and Janet X. Hao

No 18405, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Investment in a broad array of intangible capital - R&D, organizational capital, worker training, and brand equity - has occurred in many of the most advanced world economies and has been found to be an important source of economic growth. This evidence suggests that intangible capital formation may play an important role in China's reform-driven transformation to a more market-oriented open economy. Though the literature on intangible capital is expanding, there has as yet been no general assessment of its role in China's rapid economic growth. This paper seeks to fill this gap by estimating how much intangible investment has taken place there over the last two decades. The importance of this capital as a driver of China's recent growth is then assessed using a growth accounting framework, and the results compared to similar findings for the U.S., Japan, the U.K., Germany, France, Italy, and Spain, as well as Japan during its high growth period. The paper also looks beyond the growth accounting framework to the role of saving rates and long-run convergence in shaping longer-term growth prospects. It also focuses on the problem of accurate economic measurement in an economy undergoing rapid transformation.

JEL-codes: O11 O30 O47 O53 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-fdg and nep-tra
Note: PR
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Citations: View citations in EconPapers (22)

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