Comparing China and India : A factor accumulation perspective

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review

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Original languageEnglish
Pages (from-to)879-894
Journal / PublicationJournal of Comparative Economics
Volume41
Issue number3
Publication statusPublished - Aug 2013

Abstract

The remarkable economic transformations in China and India in recent decades have been accompanied by almost equally remarkable different development patterns. For example, the empirical data during 1985-2004 show that, compared with India, China's economy has exhibited (i) considerably higher rates of physical capital formation; (ii) much higher ratios of measured physical to human capital; and (iii) a more physical-capital-friendly public policy. Motivated by these empirical observations, we study the accumulation of both physical and human capital in a one-sector growth model with a CES production function. After deriving some qualitative implications from the model, we estimate the key technological parameters of the normalized CES production function using the panel data at the provincial level for China and at the state level for India. Our estimation results suggest that our model implications match broadly with the above stylized development patterns regarding China and India. © 2013 Association for Comparative Economic Studies.

Research Area(s)

  • Chinese and Indian economic development, Normalized CES production function, Physical and human capital