Regional Capital Mobility in China: 1978-2006

Kit Ming Yan, Kenneth Chan, Vinh Q.T. Dang and Jennifer Lai

MPRA Paper from University Library of Munich, Germany

Abstract: We examine cross-region capital mobility in China and track how the degree of mobility has changed over time. The effects of fiscal and redistributive activities of different levels of government in China on private capital mobility are taken into account. Our results indicate that there was a significant improvement in capital mobility over time in China, particularly for private capital in the more developed regions. The central and provincial governments, via their taxation, spending, and transfers, loosen the relationship between private saving and investment and appear to promote capital mobility, particularly for less developed regions. There are considerable differences between more and less developed regions in terms of the degree of capital market integration and the improvement in capital mobility over time. The results have important policy implications on global re-balancing as well as regional development gap and risk-sharing within China.

Keywords: Feldstein-Horioka; Chinese cross-region capital mobility; saving-investment relationship; Chinese capital market integration (search for similar items in EconPapers)
JEL-codes: C22 C23 F21 (search for similar items in EconPapers)
Date: 2011-08
New Economics Papers: this item is included in nep-geo and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Related works:
Journal Article: Regional capital mobility in China: 1978–2006 (2011)
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