The Division of Labor, Capital, Communication Technology and Economic Growth: The Case of China 1952-99

20 Pages Posted: 22 Oct 2007

See all articles by Paresh Kumar Narayan

Paresh Kumar Narayan

Deakin University - School of Accounting, Economics and Finance

Guang-Zhen Sun

Monash University - Department of Economics; Max Planck Institute for Research Into Economic Systems

Abstract

The implications of the division of labor, capital, and technology for economic growth have long been a fundamental issue in development economics. This paper employs the bounds testing approach to cointegration to examine the relationship between the division of labor, capital accumulation, communication technology, and economic growth for China over the period 1952-99. We find that in the long run, capital stock and the division of labor both have statistically significant positive effects on growth, while in the short run the effects are not significantly positive. Telecommunication technology, rather surprisingly, has a statistically insignificant impact on growth both in the long run and in the short run. Our findings indicate that there exists a long run equilibrium relationship between capital and the division of labor on the one hand, and economic growth on the other, thereby lending support to the division of labor theory of growth.

Suggested Citation

Narayan, Paresh Kumar and Sun, Guang-Zhen, The Division of Labor, Capital, Communication Technology and Economic Growth: The Case of China 1952-99. Review of Development Economics, Vol. 11, No. 4, pp. 645-664, November 2007, Available at SSRN: https://ssrn.com/abstract=1023232 or http://dx.doi.org/10.1111/j.1467-9361.2007.00393.x

Paresh Kumar Narayan (Contact Author)

Deakin University - School of Accounting, Economics and Finance ( email )

221 Burwood Highway
Burwood, Victoria 3215
Australia

Guang-Zhen Sun

Monash University - Department of Economics ( email )

Wellington Road
Clayton, Victoria 3
Australia
61-3-99052409 (Phone)
61-3-99055476 (Fax)

Max Planck Institute for Research Into Economic Systems

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D-07745 Jena, 07745
Germany

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