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Saving–investment Association and Regional Capital Mobility in C hina: A Nonparametric Panel Approach
Author(s) -
Jiang Mingming
Publication year - 2014
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/1468-0106.12026
Subject(s) - investment (military) , panel data , economics , capital (architecture) , government (linguistics) , nonparametric statistics , private capital , monetary economics , labour economics , econometrics , macroeconomics , geography , foreign direct investment , archaeology , politics , political science , linguistics , philosophy , law
Using a nonparametric panel data model, this paper estimates the degree of time‐varying and province‐specific capital mobility in C hina during 1970–2006. We estimate the savings–investment association, that is, the savings retention rate à la F eldstein and H orioka, as a measure of capital mobility. We also split the total savings (investment) into private and government savings (investment) to explore the role of government in improving capital mobility. Over time, we find an improvement in capital mobility after the mid‐1990s. Across provinces, we observe higher capital mobility in eastern/coastal regions. From the 1990s, the government is found to play a less important role in promoting capital mobility. Across provinces, the government is found to be more important in either the municipalities ( S hanghai and B eijing) or the less developed inland provinces.