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

Paresh Narayan () and Russell Smyth

Review of Applied Economics, 2006, vol. 02, issue 01, 18

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: International; Development (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (5)

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

DOI: 10.22004/ag.econ.50282

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