The Deep Determinants of Economic Development in China – A Provincial Perspective

15 Pages Posted: 19 Apr 2018

See all articles by Linda Glawe

Linda Glawe

FernUniversität in Hagen

Helmut Wagner

University of Hagen (Fernuniversitaet Hagen)

Date Written: January 30, 2018

Abstract

There is a significant body of literature arguing that institutional quality is the key for long run economic growth and development. While the majority of these studies are based on cross-country growth regression, in our paper, we focus on the institution-economic growth nexus within a particular country, namely China. China is often regarded as an exception by having achieved miraculous growth for more than three decades despite relatively low institutional quality. However, our key findings suggest that at the provincial level, institutional quality played in fact an important role for the economic success of a province in China, “trumping” geographical factors and integration which only have an indirect effect by influencing institutional quality. We employ instrumental variable estimation techniques to address the endogeneity problems regarding the institutions-development relationship.

Keywords: economic growth and development, deep determinants of economic growth, institutional quality, the Chinese economy

JEL Classification: O11, O43, O53

Suggested Citation

Glawe, Linda and Wagner, Helmut, The Deep Determinants of Economic Development in China – A Provincial Perspective (January 30, 2018). Available at SSRN: https://ssrn.com/abstract=3158586 or http://dx.doi.org/10.2139/ssrn.3158586

Linda Glawe (Contact Author)

FernUniversität in Hagen ( email )

Universitätsstr. 11 (TGZ)
Chair of Macroeconomics
58084 Hagen
Germany

Helmut Wagner

University of Hagen (Fernuniversitaet Hagen) ( email )

Universitätsstrasse 41
Feithstrathe 140
D-58084 Hagen
Germany
011-49-2331-987-2640 (Phone)
011-49-2331-987-391 (Fax)

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