Comparing China and India: A factor accumulation perspective

Kamhon Kan () and Yong Wang ()

Journal of Comparative Economics, 2013, vol. 41, issue 3, 879-894

Abstract: The remarkable economic transformations in China and India in recent decades have been accompanied by almost equally remarkable different development patterns. For example, the empirical data during 1985–2004 show that, compared with India, China’s economy has exhibited (i) considerably higher rates of physical capital formation; (ii) much higher ratios of measured physical to human capital; and (iii) a more physical-capital-friendly public policy. Motivated by these empirical observations, we study the accumulation of both physical and human capital in a one-sector growth model with a CES production function. After deriving some qualitative implications from the model, we estimate the key technological parameters of the normalized CES production function using the panel data at the provincial level for China and at the state level for India. Our estimation results suggest that our model implications match broadly with the above stylized development patterns regarding China and India.

Keywords: Physical and human capital; Normalized CES production function; Chinese and Indian economic development (search for similar items in EconPapers)
JEL-codes: C33 E25 E60 O11 O41 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:41:y:2013:i:3:p:879-894

DOI: 10.1016/j.jce.2013.01.008

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