Advertisement

The Inter-Provincial Capital Flows in China Before and After the Transition to a Market Economy

  • Shinichi Watanabe
Chapter
  • 49 Downloads
Part of the IDE-JETRO book series (IDE)

Abstract

One of the central characteristics of the transition process from a centrally planned economy to a market economy is the transformation of the mechanism of capital accumulation – how savings are made and allocated among potential investment projects in an economy. In a centrally planned economy it is the state planning and its administrative mechanism that coordinate the decisions of savings and investment for the nation as a whole. By contrast, in a market economy it is the financial markets and financial intermediaries that coordinate the decisions of savers and investors. To the extent that market institutions evolve over time, one should expect that during the initial stages of the transition process the functions performed by financial markets and intermediaries fall short of those observed in well-developed market economies, and that they improve only gradually in line with the progress of institution building. A natural question is whether it is possible to test empirically the hypothesis that financial institutions evolve gradually and that their functions are imperfect at the beginning of the transition.1

Keywords

Capital Market Market Economy State Planning Public Investment Saving Rate 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Bayoumi, Tamin and Andrew Rose (1993) “Domestic Savings and Intra-national Capital Flows,” European Economic Review 37, 1197–1202.CrossRefGoogle Scholar
  2. Boyreau-Debray, Genevieve and Shang-Jin Wei (2004) “Can China Grow Faster? A Diagnosis of the Fragmentation of its Domestic Capital Market,” IMF Working Paper, WP/04/76.Google Scholar
  3. Dekle, Robert (1996) “Saving–investment Associations and Capital Mobility: on the Evidence from Japanese Regional Data,” Journal of International Economics 41, 53–72.CrossRefGoogle Scholar
  4. Feldstein, Martin and Phillips Bacchetta (1989) “National Saving and International Investment,” Working Paper 3164, NBER.Google Scholar
  5. Feldstein, Martin and Charles Horioka (1980) “Domestic Saving and International Capital Flows,” The Economic Journal 90, 314–29.CrossRefGoogle Scholar
  6. Helliwell, John and Ross McKitrick (1998) “Comparing Capital Mobility across Provincial and National Borders,” Working Paper 6624, NBER.Google Scholar
  7. Ishikawa, Shigeru (1990) Kaihatsu Keizaigaku no Kihon Mondai. Tokyo: Iwanami Shoten (in Japanese).Google Scholar
  8. Kojima, Reitsu (1997) Gendai Chugoku no Keizai. Tokyo: Iwanami Shoten (in Japanese).Google Scholar
  9. Obstfeld, Maurice and Kenneth Rogoff (2000) “The Six Major Puzzles in International Macroeconomics: Is there a Common Cause?” Working Paper 7777, NBER.Google Scholar
  10. Sinn, Stefan (1992) “Saving–investment Correlations and Capital Mobility: on the Evidence from Annual Data,” The Economic Journal 102, 1162–1170.CrossRefGoogle Scholar
  11. Yamori, Nobuyoshi (1995) “The Relationship between Domestic Savings and Investment: the Feldstein–Horioka Test Using Japanese Regional Data,” Economic Letters 48, 361–6.CrossRefGoogle Scholar

Copyright information

© Institute of Developing Economies (IDE), JETRO 2006

Authors and Affiliations

  • Shinichi Watanabe

There are no affiliations available

Personalised recommendations