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http://ssrn.com/abstract=949764
 
 

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The Return to Capital in China


Chong-En Bai


University of Hong Kong - School of Economics and Finance; University of Michigan - William Davidson Institute

Chang-Tai Hsieh


University of Chicago - Booth School of Business; University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Yingyi Qian


University of California, Berkeley - Department of Economics; Centre for Economic Policy Research (CEPR)

December 2006

NBER Working Paper No. w12755

Abstract:     
China's investment rate is one of the highest in the world, which naturally leads one to suspect that the return to capital in China must be quite low. Using the data from China's national accounts, we estimate the rate of return to capital in China. We find that the aggregate rate of return to capital averaged 25% during 1978-1993, fell during 1993-1998, and has become flat at roughly 20% since 1998. This evidence suggests that the aggregate return to capital in China does not appear to be significantly lower than the return to capital in the rest of the world. We also find that the standard deviation of the rate of return to capital across Chinese provinces has fallen since 1978.

Number of Pages in PDF File: 40

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Date posted: December 15, 2006  

Suggested Citation

Bai, Chong-En and Hsieh, Chang-Tai and Qian, Yingyi, The Return to Capital in China (December 2006). NBER Working Paper No. w12755. Available at SSRN: http://ssrn.com/abstract=949764

Contact Information

Chong-En Bai
University of Hong Kong - School of Economics and Finance ( email )
8th Floor Kennedy Town Centre
23 Belcher's Street
Kennedy Town
Hong Kong
(852) 2859-1036 (Phone)
(852) 2548-1152 (Fax)
University of Michigan - William Davidson Institute ( email )
724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States
Chang-Tai Hsieh (Contact Author)
University of Chicago - Booth School of Business ( email )
5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
University of California, Berkeley - Department of Economics ( email )
549 Evans Hall #3880
Berkeley, CA 94720-3880
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Yingyi Qian
University of California, Berkeley - Department of Economics ( email )
549 Evans Hall #3880
Berkeley, CA 94720-0822
United States
510-643-0687 (Phone)
510-642-6615 (Fax)
HOME PAGE: http://elsa.berkeley.edu/~yqian
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
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