 Local Government Debt, Factor Misallocation and Regional Economic Performance in ChinaJianxin Wu, Yanrui Wu and Bing Wang China & World Economy, 2018, vol. 26, issue 4, 82-105 Abstract: This paper examines total factor efficiency and productivity performance by taking into account local government debt (LGD) in 31 Chinese provincial regions for the period 2000–2013. The results show that neglecting LGD may overstate economic performance in Chinese provinces. The eastern region shows better performance in single factor efficiency and total factor efficiency than the non‐eastern regions. The western region shows the worst total factor performance. The north‐eastern region is the only region that has experienced a decline in total factor performance. The state‐dominated, investment‐driven development model may help technological progress across Chinese regions but could lead to significant factor misallocation. We argue that biases towards more state‐dominated investment and land supply in less productive western, central and north‐eastern regions, at the expense of investment and land supply in more productive eastern regions, have contributed to the recent slowdown in economic growth in China. Therefore, further market‐oriented reforms in factor markets should be considered in the future. Date: 2018 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:chinae:v:26:y:2018:i:4:p:82-105 Ordering information: This journal article can be ordered from Access Statistics for this article China & World Economy is currently edited by Yongding Yu More articles in China & World Economy from Institute of World Economics and Politics, Chinese Academy of Social Sciences Contact information at EDIRC. |
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