Industrial policy, production efficiency improvement and the Chinese county economic growth

Wang Zhenhua () and Zhang Guangsheng ()
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Wang Zhenhua: College of Economics and Management, Shenyang Agricultural University, Shenyang, China
Zhang Guangsheng: College of Economics and Management, Shenyang Agricultural University, Shenyang, China

Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, 2016, vol. 34, issue 2, 505-528

Abstract: This study aims at analyzing the difference in the level of economic development between China’s counties from the two perspectives of industrial policy and production efficiency. Based on panel data of 1830 Chinese counties, this study employs the new classical economic growth theory framework to analyze the counties’ economic growth by the perpetual inventory method, Malmquist index, among others. The results show that the economy of the counties exhibits ? convergence since 2004, and the absolute differences in the different counties are expanding. Industrial policy ensures the additional deepening of the level of capital in the county. Additionally, a substantial difference was observed between the agricultural sector and the non-agricultural sector, whereby the total factor productivity and the technical efficiency are on the rise, resulting in the phenomenon of dual paths of technological progress. In summary, the capital deepening difference between the sectors, production efficiency, and dual paths of technological progress owing to the counties’ industrial policy are the basic reasons for the regional differences in the level of economic development in China.

Keywords: county economy; ? convergence; industrial policy; dual paths of technological progress (search for similar items in EconPapers)
JEL-codes: C25 O11 O13 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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