Driving Factors Of Guangdong’s Economic Growth:1978-2012

As the pioneer of Chinese economic reform, Guangdong has made remarkable economicperformance in the last few decades. What are the main driving factors of Guangdong’seconomic growth? How to estimate their contributions? What are the prospects ofGuangdong’s economic? Making factor analysis of Guangdong’s economic growth will bepropitious to sum up experience and find new momentum.Referring to endogenous growth model, this paper employs Cobb–Douglas productionfunction incorporating human capital input, and introduces variables of technical progress,institutional change, structural adjustment in order to analyze the driving factor ofGuangdong’s economic growth from1978to2012. The result indicates that factor input,improvement of human capital efficiency, technical progress, institutional change, structuraladjustment are the main driving factors of Guangdong’s economic growth.Further calculation indicates that Guangdong’s economic growth is mainly driven byfactor input, especially capital input. The contribution portion of factor input from1978to2012is71.70%, capital input61.42%, labor input10.28%. Total factor productivity (TFP)has made significant contribution. Its contribution portion is28.30%, which showsGuangdong’s economic is not only driven by input without TFP improvement(Krugman,1994). Human capital and technical progress have become important drivingforces, reaching the contribution portion of9.31%and6.55%. The contributions ofinstitutional change and structural adjustment have declined during the last three decades.Based on the forecast of driving factors’ future trend, this paper argues that the averagegrowth rate of Guangdong’s economic from2013to2025is8.47%. In the optimistic scenarioof education, technology and urbanization improvement, a higher average growth rate will bemaintained as9.42%.