Domestic versus foreign capital and returns to scale in China's provincial industries

Erkin Bairam

Applied Economics Letters, 1999, vol. 6, issue 9, 621-624

Abstract: This paper is mainly concerned with estimating an appropriate production function for the Chinese industry using provincial data. The estimated equations suggest that the appropriate production function is a Cobb-Douglas which reveals statistically significant economies of scale. The results reported also reveal that the marginal product of foreign capital is significantly higher than that of domestic capital used in the production process in all but one province.

Date: 1999
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DOI: 10.1080/135048599352745

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