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Frontiers of Economics in China

Front Econ Chin    2013, Vol. 8 Issue (3) : 362-389
Is Public Capital Productive in China? Evidence from a Panel of Chinese Provinces
Jie Zhang()
Graduate School of Economics, Keio University, Tokyo 108-8345, Japan
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In addition to the direct productivity effect, public capital also has an indirect effect on private capital stock and labor input. This paper offers an evaluation of both the direct and indirect effects of Chinese public capital by applying a trans-log aggregate production function including public capital stock to a panel of regional data from 1986–2009. Moreover, we calculate the impact of public capital on regional total factor productivity (TFP) performance by introducing a system GMM estimation. The results show that the output elasticity of Chinese public capital stock is significantly positive, but decreasing year on year, and public capital is found to be a substitute for labor but complementary to private capital input. Finally, public capital has a significant positive effect on regional TFP performance.

Keywords Chinese public capital      productivity      total factor productivity     
Corresponding Author(s): Jie Zhang,   
Issue Date: 05 September 2013
 Cite this article:   
Jie Zhang. Is Public Capital Productive in China? Evidence from a Panel of Chinese Provinces[J]. Front Econ Chin, 2013, 8(3): 362-389.
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