The Studies On The Correlations Between Chinese Capital Formation, Production Efficiency And Economic Growth Since 1978

Frist, this paper uses unit root test and cointegration techniques to study the correlations between Chinese pulic capital and private capital formation, production efficiency and economic growth under the total production function by examining the sample from1978 to 2003. Empirical datas show the high elasticity of output with respect to public capital and large externalities to capital accumulation after the China economic reforms(1978). It is evident that the higher elasticity of output with respect to public capital, no matter on the assumption of exogenous technology advancement or technology is considered to endogenously evolve as a function of capital accumulation. On the basis of econometric analysis, we have back up the endogenous theory of technology evolved by capital accumulation. When these externalities are fully taken into consideration, the elasticity of output with respect to public capital is 0.54, which is consistent with of the value of the domestic studies at present .The share of aggregate capital in output is around 0.74, which is fairly similar to the value(0.75) of Romer(1987) and the value(0.8) of Barro and Sala-i-Martin(1992). Econometric analysis shows both public and private capital per worker are shown to be weakly exogenous with respect to output per worker. Although there is a cointegration relation among macroeconomics variables, the role of adjustment isn't distinct. The departure to the long run value of the system of cointegration relation cann't automatically rectify from the response of public and private capital stock. The...