Growing Like China

Song, Zheng; Storesletten, Kjetil; Zilibotti, Fabrizio

doi:10.1257/aer.101.1.196

Cited by 1,353 publications

(783 citation statements)

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“…However, the success of the experiment strengthened the reformist fraction in the CCP and softened the conservative opposition. In 1984, 14 coastal cities were 5 For more detailed analyses of the economic growth of China before and after the start of economic reforms, see Cheremukhin et al (2015), Song et al (2011), and Storesletten and Zilibotti (2014). 6 The SEZ status implied tax deductions, special tari¤s for import and export, and exemptions from the regulations on foreign exchange and land use.…”

Section: The Timeline Of Sezmentioning

confidence: 99%

Economic Reforms and Industrial Policy in a Panel of Chinese Cities

2013

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We study the effect of place-based industrial policy on economic development, focusing on the establishment of Special Economic Zones (SEZ) in China. We use data from a panel of Chinese (prefecture-level) cities from 1988 to 2010. Our difference-in-difference estimation exploits the variation in the establishment of SEZ across time and space. We find that the establishment of a state-level SEZ is associated with an increase in the level of GDP of about 20 %. This finding is confirmed with alternative specifications and in a sub-sample of inland provinces, where the selection of cities to host the zones was based on administrative criteria. The main channel is a positive effect on physical capital accumulation, although SEZ also have a positive effect on total factor productivity and human capital investments. We also investigate whether there are spillover effects of SEZ on neighboring regions or cities further away. We find positive and often significant spillover effects. AbstractWe study the e¤ect of place-based industrial policy on economic development, focusing on the establishment of Special Economic Zones (SEZ) in China. We use data from a panel of Chinese (prefecture-level) cities from 1988 to 2010. Our di¤erence-in-di¤erence estimation exploits the variation in the establishment of SEZ across time and space. We …nd that the establishment of a state-level SEZ is associated with an increase in the level of GDP of about 20%. This …nding is con…rmed with alternative speci…cations and in a sub-sample of inland provinces, where the selection of cities to host the zones was based on administrative criteria. The main channel is a positive e¤ect on physical capital accumulation, although SEZ also have a positive e¤ect on total factor productivity and human capital investments. We also investigate whether there are spillover e¤ects of SEZ on neighboring regions or cities further away. We …nd positive and often signi…cant spillover e¤ects.JEL Codes. H72, L52, O25, O38, O53, P21, R11.

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Section: The Timeline Of Sezmentioning

confidence: 99%

Economic Reforms and Industrial Policy in a Panel of Chinese Cities

2013

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“…Supply side factors were not found to be primarily responsible for firms' heterogeneity in terms of growth and survival in developed economies. In less developed economies, financial constraints due to insufficient internal savings and strong discrimination against small firms on credit markets impede growth [Song et al, 2011] and should not be ignored. The same comment is relevant to capital adjustment costs that are important in some contexts [Foster et al, 2012] and to human capital resources [Ployhart, Moliterno, 2011].…”

Section: Determinants and Patterns Of Sme Growth: The Russian Contextmentioning

confidence: 99%

Suboptimal Size: Factors Preventing the Growth of Russian Small and Medium-Sized Enterprises

Golikova

Kuznetsov²

2017

Foresight and STI

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T he Russian manufacturing sector has an underdeveloped SME sector both in terms of employment and contributions to GDP in comparison with other economies, with evident signs of stagnation over the past few decades. However, little is known about the capacity of SME sector, i.e., the opportunities to grow and thus exploit the benefits reaped from economies of scale. This paper attempts to estimate the impact of internal and external factors on a firm's competitiveness in the context of optimal enterprise size.The main conclusion is that that the satisfaction of Russian SME managers has been increasing due to factors such as the sufficient supply of qualified personnel, modern infrastructure, developed partnerships, the expansion Кeywords: small and medium enterprises; scale of business; determinants of growth; barriers to growth; Russia.of the geographical scope of available markets and favorable institutional conditions for entrepreneurship. In contrast, serious constraints to SME growth in Russia discourage entrepreneurs and lead to poor decisions by managers such as exploiting shadow schemes, leaving the market or growth in the form of nominally independent firms under the informal "umbrella" of one owner. Formidable bureaucratic barriers and significant transactional costs increase the vulnerability of small businesses to administrative pressure. In order to survive and remain on the market, Russian companies have to adapt to the existing institutional environment, and must be larger compared to their counterparts in developed economies.

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“…As economic reforms proceeded and a private sector developed, the state-owned sector has been given priority by these banks (e.g. Aziz, 2006;Aziz and Cui, 2007;Prasad, 2009;Ferri and Liu, 2010;Knight and Ding, 2010;IMF, 2011;Song et al, 2011). Bank lending rates are low, easily available for state-owned firms, and there is no obvious penalty for non-repayment of loans by state-owned enterprises.…”

Section: Distortions In the Financial Marketmentioning

confidence: 99%

“…Goldstein and Lardy, 2006;Cline and Williamson, 2011;Ferguson and Schularick, 2011). Questions have also been raised about the notion that more exchange rate flexibility would significantly decrease China's current account surplus (McKinnon, 2006;Lin et al, 2010;Reisen, 2010;Benassy-Quere et al, 2011;Song et al, 2011), at least if not accompanied by structural changes in social and economic policy boosting consumption.…”

Section: Introductionmentioning

confidence: 99%

“…Kujis and Wang (2005, p. 8), for example, conclude that "[t]he current pattern of growth and resulting consequences for resource intensity and income inequality could be linked to the growth strategy the government has pursued in the past." In line with this assessment, there is a broad consensus that structural measures need to be taken in order to increase consumption as a share of output (Kuijs and Wang, 2005;Blanchard and Giavazzi, 2006;Yu, 2007;Prasad, 2009;Guo and N'Diaye, 2009;Huang and Tao, 2010;Reisen, 2010;Song et al, 2011;Lu andGao, 2011, Yang 2012), to reduce overcapacities in the industrial sector (Prasad, 2009;Zhu and Kotz, 2011;Blanchard and Giavazzi, 2006), and to address the problems of environmental degradation (Huang and Tao, 2010), as well as internal political tensions as a result of high income inequality especially between rural and urban areas (Kuijs and Wang, 2005), and external macroeconomic imbalances (Blanchard and Giavazzi, 2006;Yu, 2007;Prasad, 2009;Guo and N'Diaye, 2009;Huang and Tao, 2010;Razmi, 2010;Lu and Gao, 2011;Muto and Fukumoto, 2011;IMF, 2011).…”

Section: Introductionmentioning

confidence: 99%

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From internal imbalances to global imbalances: a survey on the causes of China’s export-led growth

Sturn

2014

China Economic Journal

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There is a broad consensus that China's export-and investment-led growth model is unsustainable and therefore needs to become more balanced. In the public debate, Chinese exchange rate interventions are mostly made (solely) responsible for this. But it is unclear whether and how much the Renminbi is undervalued, and if an exchange rate appreciation helps to reduce China's current account surplus significantly. This survey reviews the international literature on China's export-oriented growth model. Structural internal imbalances in the Chinese economy, resulting in an extremely low consumption-to-GDP share by historical and international standards play hereby a central role. Related to this are: 1.) the drop in household and wage income as a share of GDP and low employment growth, and its impact on consumption demand; 2.) the increase in income uncertainty and inequality, and its impact on household savings; and 3.) the role of government spending, i.e. high and increasing public surpluses. The central policy challenge is therefore to increase household incomes, and to reduce income inequality and uncertainty.

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Growing Like China

Cited by 1,353 publications

References 40 publications

Economic Reforms and Industrial Policy in a Panel of Chinese Cities

Economic Reforms and Industrial Policy in a Panel of Chinese Cities

Suboptimal Size: Factors Preventing the Growth of Russian Small and Medium-Sized Enterprises

From internal imbalances to global imbalances: a survey on the causes of China’s export-led growth

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