A Vector Error Correction Model (VECM) Approach in explaining the relationship between Fixed Investment and Economic Growth in Rural China
Keywords:
fixed investment in rural china, rural china, economy in rural china, vector error correction model
Abstract
A rural economy can be affected by fixed investment in a rural area positively or negatively. Investment in fixed assets is one of the core measures of capital spending in rural China and the rural economy is a prominent part of china's national economy. It is important to study the dynamic relationship between fixed investment and economic growth in rural China. Based on time-series data from 1990 to 2016, this paper employed a Vector Error Correction Model (VECM) approach to lead the stationarity test, Cointegration test, stability test, and granger causality test. The result indicated that, in the long term, Fixed Investment fluctuation promotes GDP growth in rural China while GDP fluctuation is not the source of fixed investment increase in rural China.
Downloads
- Article PDF
- TEI XML Kaleidoscope (download in zip)* (Beta by AI)
- Lens* NISO JATS XML (Beta by AI)
- HTML Kaleidoscope* (Beta by AI)
- DBK XML Kaleidoscope (download in zip)* (Beta by AI)
- LaTeX pdf Kaleidoscope* (Beta by AI)
- EPUB Kaleidoscope* (Beta by AI)
- MD Kaleidoscope* (Beta by AI)
- FO Kaleidoscope* (Beta by AI)
- BIB Kaleidoscope* (Beta by AI)
- LaTeX Kaleidoscope* (Beta by AI)
How to Cite
References
C. Adelman (1973) Economic Growth and Social Equity In Developing Countries.
A. Hatemi, M. Irandoust (2002) Investigating causal relations between fixed investment and economic growth. 55(1), 25-35.
J. Arias, J. Rubio-Ram_rez, D. Waggoner (2018) Inference Based on Structural Vector Autoregressions Identified With Sign and Zero Restrictions: Theory and Applications. 86(2), 685-720. https://doi.org/10.3982/ecta14468
Manuel Arellano, Olympia Bover (1995) Another look at the instrumental variable estimation of error-components models. 68(1), 29-51. https://doi.org/10.1016/0304-4076(94)01642-d
Richard Baillie (1996) Long memory processes and fractional integration in econometrics. 73(1), 5-59. https://doi.org/10.1016/0304-4076(95)01732-1
Lawrence Bouton, Mariusz Sumlinski (2000) Trends in private investment in developing countries. No. 41, Statistics for. 41.
Borenstein De Gregorio, J. Lee, J. (1998) How does a foreign direct investment affect economic growth?. 45, 115-135.
N. Bose, M. Haque, D. Osborn (2007) PUBLIC EXPENDITURE AND ECONOMIC GROWTH: A DISAGGREGATED ANALYSIS FOR DEVELOPING COUNTRIES*. 75, 533-556.
M. Blomstoerm, R. Lipsey, M. Zejan (1994) What Explains the Growth of Developing Countries?. 243-259. https://doi.org/10.1093/oso/9780195083903.003.0009
Mario Blejer, Mohsin Khan (1984) Government Policy and Private Investment in Developing Countries. 31(2), 379.
David Canning, Peter Pedroni (2008) INFRASTRUCTURE, LONG‐RUN ECONOMIC GROWTH AND CAUSALITY TESTS FOR COINTEGRATED PANELS. 76(5), 504-527. https://doi.org/10.1111/j.1467-9957.2008.01073.x
China National Bureau of Statistics (CNBS), various years (2019) China Statistical Yearbook.
S. Chong, Poole (2013) Financing Infrastructure: A Spectrum of Country Approaches. 65-76.
N. Cheng (2004) Smallholder economy in Chinese.
Robert Engle, C. Granger (1987) Co-Integration and Error Correction: Representation, Estimation, and Testing. 55(2), 251. https://doi.org/10.2307/1913236
Ronald Findlay (1978) Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model. 92(1), 1. https://doi.org/10.2307/1885996
Xiaolan Fu, V. Balasubramanyam (2003) Township and Village Enterprises in China. 39(4), 27-46. https://doi.org/10.1080/713869424
Shangquan Gao (1992) 中国的城市经 济体制改革.
C. Granger (1980) Testing for causality. A personal viewpoint. 2(4), 329-352.
C. Granger (1981) Some properties of time series data and their use in econometric model specification. 16(1), 121-130. https://doi.org/10.1016/0304-4076(81)90079-8
Joshua Greene, Delano Villanueva (1991) Private Investment in Developing Countries: An Empirical Analysis. 38(1), 33. https://doi.org/10.2307/3867034
Søren Johansen (1988) Statistical analysis of cointegration vectors. 12(2-3), 231-254. https://doi.org/10.1016/0165-1889(88)90041-3
Lawrence Christiano, Martin Eichenbaum, Robert Vigfusson (2006) Alternative Procedures for Estimating Vector Autoregressions Identified with Long-Run Restrictions. 4(2-3), 475-483. https://doi.org/10.1162/jeea.2006.4.2-3.475
Furen Dong (1999) An Economic History of the People's Republic of China.
J. De Long, Lawrence Summers (1991) Equipment Investment and Economic Growth.
J. De Long, Lawrence Summers (1993) How strongly do developing economies benefit from equipment investment?. 32(3), 395-415. https://doi.org/10.1016/0304-3932(93)90024-a
J. De Long, Lawrence Summers, Andrew Abel (1992) Equipment Investment and Economic Growth: How Strong is the Nexus?. 1992(2), 157. https://doi.org/10.2307/2534583
William Easterly, Sergio Rebelo (1993) Fiscal policy and Economic Growth: An empirical investigation. 32(3), 417-458. https://doi.org/10.1016/0304-3932(93)90025-b
Søren Johansen (1992) A Representation of Vector Autoregressive Processes Integrated of Order 2. 8(2), 188-202. https://doi.org/10.1017/s0266466600012755
Wenxiu Han (1995) An Analysis of China's Investment Rate Since Reform. Jingji yanjiu (Economic Research). 1995, 3-8.
Dong He, Wenlang Zhang, Jimmy Shek (2007) HOW EFFICIENT HAS BEEN CHINA'S INVESTMENT? EMPIRICAL EVIDENCE FROM NATIONAL AND PROVINCIAL DATA. 12, 597-617.
E. Hannan, B. Quinn (1979) The determination of the order of an Autoregression. Journal of the royal statistical society. 41(2), 190-195. https://doi.org/10.1111/j.2517-6161.1979.tb01072.x
International Finance Cooperation (2000) Trends in private investment in developing countries. No. 41, Statistics for.
&. Kónya, Singh (2006) Exports, imports, and economic growth in India. La Trobe University. 06, 23.
Stephen Knack, Philip Keefer (1995) INSTITUTIONS AND ECONOMIC PERFORMANCE: CROSS‐COUNTRY TESTS USING ALTERNATIVE INSTITUTIONAL MEASURES. 7(3), 207-227. https://doi.org/10.1111/j.1468-0343.1995.tb00111.x
M. Knight, N. Loyaza, D. Villanueva (1993) Testing the Neoclassical Theory of Economic Growth: A Panel Data Approach. 40(3), 512. https://doi.org/10.2307/3867446
Mohsin Khan, Manmohan Kumar (1997) Public and Private Investment and The Growth Process in Developing Countries. 59(1), 69-88. https://doi.org/10.1111/1468-0084.00050
Kwiatkowski al (1992) Testing the null hypothesis of stationarity against the alternative of a unit root: How sure are we that economic time series have a unit root?. 54(1-3), 159-178. https://doi.org/10.1016/0304-4076(92)90104-y
Li, Shi (ed.) (2008) Zhongguo Jumin shouru fenpai yanjiu (Research on income distribution in China).
Li Shi, Zhao Renwei (1994) The research on the residents' income distribution in China. 41(1), 227-244.
Xiaoyan Liang, Shuang Chen (2013) Developing Skills for Economic Transformation and Social Harmony : Yunnan Province. https://doi.org/10.1596/16523
Robert Looney, Peter Frederiken (1997) Government Investment and Follow-on Private Sector Investment in Pakistan. 22(1), 91-100.
Jorge Lopes, Les Ruddock, Francisco Ribeiro (2002) Investment in construction and economic growth in developing countries. 30, 152-159. https://doi.org/10.1080/09613210110114028
Ross Levine (1997) Financial development and economic growth: views and agenda. Journal of Economics. 35(2). https://doi.org/10.1596/1813-9450-1678
Angus Maddison, Harry Wu (2007) China's Economic Performance: How Fast has GDP Grown; How Big it is Compared with the USA? Paper prepared for the.
Argiro Moudatsou (2003) Foreign Direct Investment and Economic Growth in the European Union. 18(4), 689-707. https://doi.org/10.11130/jei.2003.18.4.689
Temitope Oshikoya (1994) Macroeconomic Determinants of Domestic Private Investment in Africa: An Empirical Analysis. 42(3), 573-596.
Filiz Ozkan, Omer Ozkan, Murat Gunduz (2012) Causal relationship between construction investment policy and economic growth in Turkey. 79, 362-370. https://doi.org/10.1016/j.techfore.2011.04.007
Elena Podrecca, Gaetano Carmeci (2001) Fixed investment and economic growth: new results on causality. 33(2), 177-182. https://doi.org/10.1080/00036840122890
Dwight Perkins (1975) Growth and Changing Structure of China's Twentieth Century Economy. In Dwight H. Perkins, editor. 115-165.
Tong Zhihui (2005) Rural NGOs and the Development of Rural China.
Dmitriy Silka (2017) Development of Organizing and Economic Measures for Monitoring the Cost of Construction Resources. 106, 08042. https://doi.org/10.1051/matecconf/201710608042
Sims al (1980) Inference in Linear Time Series Models with some Unit Roots. 58(1), 113. https://doi.org/10.2307/2938337
B. Sanchez-Robles (1998) INFRASTRUCTURE INVESTMENT AND GROWTH: SOME EMPIRICAL EVIDENCE. 16(1), 98-108. https://doi.org/10.1111/j.1465-7287.1998.tb00504.x
Rozelle Scott (1994) Rural Industrialization and Increasing Inequality: Emerging Patterns in China's Reforming Economy. 19, 362-391.
Zheng Song, Kjetil Storesletten, Fabrizio Zilibotti (2011) Growing Like China. 101(1), 196-233. https://doi.org/10.1257/aer.101.1.196
Duo Qin, Pilipinas Marie Anne Cagas, Xin-Hua He (2006) How much does investment drive economic growth in China?. 28, 751-774. https://doi.org/10.1016/j.jpolmod.2006.02.004
Thomas Rawski (1980) China's Industrial Performance. 108-193.
Thomas Rawski (2001) What is happening to China's GDP statistics?. 12(4), 347-354. https://doi.org/10.1016/s1043-951x(01)00062-1
World Bank (2002) Private Sector Development Strategy Directions for the World Bank Group.
Li Xing, Shenggen Fan, Xiaopeng Luo, Xiaobo Zhang (2009) Community poverty and inequality in western China: A tale of three villages in Guizhou Province. 20(2), 338-349. https://doi.org/10.1016/j.chieco.2008.10.006
Meng Xu, Susan Grant-Muller, Ziyou Gao (2015) Evolution and assessment of economic regulatory policies for expressway infrastructure in China. 41, 42-49. https://doi.org/10.1016/j.tranpol.2015.03.007
Alwyn Young (2003) Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period. 111(6), 1220-1261. https://doi.org/10.1086/378532
Y. Yao (2004) Rural financial development and economic growth in China. an empirical analysis. (5), 24-31.
Engle Yoo (1987) Forecasting and Testing in the co-integrated system. 35, 143-159.
J. Yang, Z. Huang, X. Zhang, T. Reardon (2013) The Rapid Rise of Cross‐Regional Agricultural Mechanization Services in China. 1-7.
Z. Yang, H. Shi, L. (2014) The strategy prepares for Chinese new urbanization. 27(2), 28-34.
H. Zhang (1999) FDI and economic growth: evidence from ten East Asian Economies. 7(4), 517-535.
ed Zhen Peiyian (1999) Xin Zhongguo jingji 50 nian 1949-99 (New China's Economy in the Last Fifty Years.
Siqi Zheng, Fenjie Long, C. Fan, Yizhen Gu (2009) Urban Villages in China: A 2008 Survey of Migrant Settlements in Beijing. 50(4), 425-446. https://doi.org/10.2747/1539-7216.50.4.425
Published
2020-08-24
Issue
Section
License
Copyright (c) 2020 Authors and Global Journals Private Limited
This work is licensed under a Creative Commons Attribution 4.0 International License.