Democracy and Economic Growth in China: Evidence from Cointegration and Causality Testing

Paresh Kumar Narayan () and Russell Smyth ()

Review of Applied Economics, 2006, vol. 2, issue 1

Abstract: This article considers the relationship between democracy and economic growth in China using the Error-Correction Mechanism test for cointegration, Autoregressive Distributed Lag modelling, Granger causality and dynamic modelling via variance decomposition and impulse response analysis. Our main findings are that in the long run the lack of democracy in China has had a statistically significant negative effect on real income, while in the short run democracy has had a statistically insignificant effect on economic growth. Our results suggest that in the long run growth in capital, labour and democracy Granger cause economic growth, while in the short run there is bi-directional Granger causality between democracy and economic growth.

Keywords: China; democracy; economic growth; International Development; C22; E23 (search for similar items in EconPapers)
Date: 2006
View list of references

Downloads: (external link)
http://purl.umn.edu/50282 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ags:reapec:50282

Access Statistics for this article

More articles in Review of Applied Economics from Review of Applied Economics
Series data maintained by AgEcon Search ().