Externality from China’s Non-State Sector’s Growth to its State-Sector’s Growth: An Empirical Assessment

Xiaolu Wang and Kaliappa Kalirajan ()
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Xiaolu Wang: National Economic Research Institute, Beijing, Asia Pacific School of Economics and Government, ANU, Canberra.

Journal of Social and Economic Development, 2003, vol. 5, issue 2, 163-181

Abstract: Applying a modified modelling framework of Feder (1983) and of Ram (1986) to macroeconomic data from China, this paper assesses the direct and indirect (externality) contributions of the non-state sector growth to China’s economic growth, particularly to state-sector growth during the initial period of economic reform. The results from the empirical analysis show that the growth of the non-state sector has induced pressure on the state enterprises through intensified market competition to improve their efficiency, and has thus contributed to economic growth as an externality.

Date: 2003
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Persistent link: https://EconPapers.repec.org/RePEc:sch:journl:v:5:y:2003:i:2:p:163-181

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