Economic Reform, Structural Changes, and Regional Economic Growth in China: Cross‐Province Regressions I would like to thank professor Joon Yong Park and an anonymous referee for useful comments, Young‐woo Lee for help in data collection and management, and Gil Lee and Hojung Chang for editorial assistance. The research for this paper was supported by the 1993 non‐directed research fund of the Korea Research Foundation.
Through cross‐province growth regressions this paper analyses the relationship between China's regional economic growth and economic reforms and structural changes since 1978. By applying the extreme bound analysis, the paper has demonstrated the statistical significance and robustness of the estimated coefficients of the following variables of interest: share of the state sector, share of foreign capital in capital formation, extra‐budgetary funds to GNP ratio, and standard deviation of inflation. With these and such ‘always‐included’ variables as GNP share of investment and initial level of illiteracy, regression models explain about 60% of cross‐province variations in growth. The results suggest that continuing reductions in the state sector and attraction of foreign capital are two of the most important factors for rapid per capital income growth in China.
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Document Type: Original Article
Affiliations: Seoul National University
Publication date: November 1, 1996