The unbalanced growth hypothesis and the role of the state: The case of China's state-owned enterprises
DOI: 10.1016/j.jdeveco.2010.10.007
Title: The unbalanced growth hypothesis and the role of the state: The case of China's state-owned enterprises
Journal Title: Journal of Development Economics
Volume: 96
Issue: 2
Publication Date: November 2011
Start Page: 220
End Page: 238
Published online: online 4 November 2010
ISSN: 0304-3878
Affiliations:
  • Department of Economics, University of Southern California, 3620 South Vermont Avenue, KAP 300, Los Angeles, CA 90089-0253, USA
  • Social Science Division, Hong Kong University of Science and Technology, Hong Kong
  • Abstract: irschman's unbalanced growth hypothesis suggests that a developing economy can promote economic growth by initially investing in industries with high backward and forward linkages. In the case of Chinese economic policy today, one application would be the continued presence of the state in high-linkage sectors and the strategic withdrawal of the state from low-linkage sectors. The evidence shows that while the degree of linkage plays an important role in generating economic growth in China, province-specific withdrawal strategies for the state sector have no effect on economic growth.
    Accepted: 29 October 2010
    Received: 14 July 2007
    Revised: 9 July 2010
    Keywords: Linkage; State ownership; Industrial policy; Unbalanced growth hypothesis; Input-output model; Albert Hirschman
    Email: carstenholz@gmail.com

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