Endogenous Institutions and Economic Growth: Evidence from China

The paper examined how economic institutions affect capital accumulation in the private firms sector through the finance sector and the operation objectives of different ownership firms in a socialist market economy with Chinese characteristics, which extended the neo-classical economic growth metho...

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Main Authors: Zhao Li, Yujing Chu
Format: Article
Language:English
Published: Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu 2020-01-01
Series:Nauki o Finansach
Online Access:https://journals.ue.wroc.pl/fins/article/view/230
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author Zhao Li
Yujing Chu
author_facet Zhao Li
Yujing Chu
author_sort Zhao Li
collection DOAJ
description The paper examined how economic institutions affect capital accumulation in the private firms sector through the finance sector and the operation objectives of different ownership firms in a socialist market economy with Chinese characteristics, which extended the neo-classical economic growth method. The Author found that economic institutions were the main factors affecting the efficiency of capital allocation between the private sector and the state-owned sector. Compared with the state-owned sector, economic institutions lead private sector to a decrease in loans and government subsidies through finance sector, and to an increase in its production costs. The evidence suggests that private firms make efforts to hire special human capital to improve economic institutions as a substitute for political capital. Considering that the strategy of China's economic institutions reform was a national promotion which followed after a regional pilot, this paper found that the economic institutions' reform pilot areas had a more significant impact on economic growth.(original abstract)
format Article
id doaj-art-b77927630bdc4f56b7e5807ca8589e91
institution DOAJ
issn 2449-9811
language English
publishDate 2020-01-01
publisher Wydawnictwo Uniwersytetu Ekonomicznego we Wrocławiu
record_format Article
series Nauki o Finansach
spelling doaj-art-b77927630bdc4f56b7e5807ca8589e912025-08-20T03:07:57ZengWydawnictwo Uniwersytetu Ekonomicznego we WrocławiuNauki o Finansach2449-98112020-01-01251231Endogenous Institutions and Economic Growth: Evidence from ChinaZhao Li0Yujing Chu1Glorious Sun School of Business and Management (GSSBM), DongHua University, Tourism College, Shanghai Normal University, Shanghai, ChinaGlorious Sun School of Business and Management (GSSBM), DongHua University, Tourism College, Shanghai Normal University, Shanghai, ChinaThe paper examined how economic institutions affect capital accumulation in the private firms sector through the finance sector and the operation objectives of different ownership firms in a socialist market economy with Chinese characteristics, which extended the neo-classical economic growth method. The Author found that economic institutions were the main factors affecting the efficiency of capital allocation between the private sector and the state-owned sector. Compared with the state-owned sector, economic institutions lead private sector to a decrease in loans and government subsidies through finance sector, and to an increase in its production costs. The evidence suggests that private firms make efforts to hire special human capital to improve economic institutions as a substitute for political capital. Considering that the strategy of China's economic institutions reform was a national promotion which followed after a regional pilot, this paper found that the economic institutions' reform pilot areas had a more significant impact on economic growth.(original abstract)https://journals.ue.wroc.pl/fins/article/view/230
spellingShingle Zhao Li
Yujing Chu
Endogenous Institutions and Economic Growth: Evidence from China
Nauki o Finansach
title Endogenous Institutions and Economic Growth: Evidence from China
title_full Endogenous Institutions and Economic Growth: Evidence from China
title_fullStr Endogenous Institutions and Economic Growth: Evidence from China
title_full_unstemmed Endogenous Institutions and Economic Growth: Evidence from China
title_short Endogenous Institutions and Economic Growth: Evidence from China
title_sort endogenous institutions and economic growth evidence from china
url https://journals.ue.wroc.pl/fins/article/view/230
work_keys_str_mv AT zhaoli endogenousinstitutionsandeconomicgrowthevidencefromchina
AT yujingchu endogenousinstitutionsandeconomicgrowthevidencefromchina