Imports and growth in China

Maria Jesus Herrerias () and Vicente Orts

Economic Modelling, 2011, vol. 28, issue 6, 2811-2819

Abstract: In this paper, we analyze the role played by imports and investment on labor productivity and output in China from 1964 to 2004. In doing so, our analysis focuses on the role of technological progress incorporated into the Chinese economy through capital accumulation and imports, which could be a cause of significant technology transfer from abroad that facilitated industrialization and rapid growth in China. However, as we know that there could be other factors influencing economic development, we have also considered the role played by domestic innovation activities, competitiveness and foreign economic conditions. We focus on examining the short- and long-run effects of the considered variables as well as the direction of their causality. In addition, we investigate the role played by the exchange rate on growth and discuss some policy implications of this effect on the current debate on the appreciation of the Yuan. The empirical results provide evidence that both imports and investment encourage output and labor productivity in the long run, but neither investment causes imports nor imports cause investment. Moreover, we found that during the period considered the real exchange rate influenced output, but not productivity. These findings provide interesting insights on the future Chinese economic policy.

Keywords: Imports; Investment; R&D; Growth; China (search for similar items in EconPapers)
JEL-codes: F43 O40 O47 O53 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:28:y:2011:i:6:p:2811-2819

DOI: 10.1016/j.econmod.2011.08.025

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