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Public infrastructure as a determinant of productive performance in China

Wim P. M. Vijverberg, Feng-Cheng Fu and Chu-Ping C. Vijverberg
Journal of Productivity Analysis
Vol. 36, No. 1 (August, 2011), pp. 91-111
Published by: Springer
Stable URL: http://www.jstor.org/stable/23883951
Page Count: 21
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Public infrastructure as a determinant of productive performance in China
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Abstract

Public infrastructure investment is an essential part of China's regional development policy. This raises the question to what degree public infrastructure capital matters for labor productivity in China, at the regional level as well as over time. This paper estimates cost function models of production in industrial enterprises, using province-level data from 1993 to 2003. The estimated rate of return in industrial production is 23—25%, and on average public infrastructure contributes 2—3% points to the growth in labor productivity among these enterprises.

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