On the Relevance of Exports for Regional Output Growth in China

23 Pages Posted: 24 Jan 2013

See all articles by Christian Dreger

Christian Dreger

European University Viadrina Frankfurt (Oder); IZA Institute of Labor Economics; Chinese Academy of Social Sciences (CASS)

Yanqun Zhang

Chinese Academy of Social Sciences (CASS)

Date Written: January 1, 2013

Abstract

Despite high economic growth during the last decades, China is still vulnerable to shocks arising from industrial states. The advanced economies determine Chinese export performance, with subsequent effects on output growth. Using a production function approach, this paper examines to which extent regional GDP growth in China is export driven. In a panel of 28 Chinese provinces, series are splitted into common and idiosyncratic components, the latter being stationary. The results indicate cointegration between the common components of GDP, the capital stock and exports. In equilibrium, exports increase GDP by more than their impact expected from the national accounts. While exports and capital are weakly exogenous, GDP responds to deviations from the long run. An adjustment pattern can be detected for almost all regions, except of some provinces in the Western part of the country.

Keywords: Chinese economy, panel co-integration, expert led growth

JEL Classification: F43, O11, C23

Suggested Citation

Dreger, Christian and Zhang, Yanqun, On the Relevance of Exports for Regional Output Growth in China (January 1, 2013). DIW Berlin Discussion Paper No. 1264, Available at SSRN: https://ssrn.com/abstract=2205655 or http://dx.doi.org/10.2139/ssrn.2205655

Christian Dreger (Contact Author)

European University Viadrina Frankfurt (Oder) ( email )

Frankfurt (Oder)
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Chinese Academy of Social Sciences (CASS) ( email )

Beijing, 100732
China

Yanqun Zhang

Chinese Academy of Social Sciences (CASS) ( email )

No.5 Jianguomennei Street
Beijing, 100732
China

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