Levels of Structural Change: An Analysis of China's Development Push 1998-2014

42 Pages Posted: 2 Jun 2020

See all articles by Torsten Heinrich

Torsten Heinrich

Oxford Martin Programme on Technological and Economic Change, Oxford Martin School, University of Oxford; University of Oxford - Institute for New Economic Thinking at the Oxford Martin School; University of Bremen

Jangho Yang

INET & Oxford Martin School; New School for Social Research

Shuanping Dai

University of Duisburg-Essen - Mercator School of Management

Date Written: May 4, 2020

Abstract

We investigate structural change in the PR China during a period of particularly rapid growth 1998-2014. For this, we utilize sectoral data from the World Input-Output Database and firm-level data from the Chinese Industrial Enterprise Database. Starting with correlation laws known from the literature (Fabricant's laws), we investigate which empirical regularities hold at the sectoral level and show that many of these correlations cannot be recovered at the firm level. For a more detailed analysis, we propose a multi-level framework, which is validated with empirically. For this, we perform a robust regression, since various input variables at the firm-level as well as the residuals of exploratory OLS regressions are found to be heavy-tailed. We conclude that Fabricant's laws and other regularities are primarily characteristics of the sectoral level which rely on aspects like infrastructure, technology level, innovation capabilities, and the knowledge base of the relevant labor force. We illustrate our analysis by showing the development of some of the larger sectors in detail and offer some policy implications in the context of development economics, evolutionary economics, and industrial organization.

Keywords: Structural Change, Fabricant’s Laws, China, Labor Productivity, Economic Growth, Firm Growth

JEL Classification: L16, O10, O30, O53, L11

Suggested Citation

Heinrich, Torsten and Yang, Jangho and Dai, Shuanping, Levels of Structural Change: An Analysis of China's Development Push 1998-2014 (May 4, 2020). Available at SSRN: https://ssrn.com/abstract=3593018 or http://dx.doi.org/10.2139/ssrn.3593018

Torsten Heinrich (Contact Author)

Oxford Martin Programme on Technological and Economic Change, Oxford Martin School, University of Oxford ( email )

University of Oxford
34 Broad Street
Oxford, OX1 3BD
United Kingdom

University of Oxford - Institute for New Economic Thinking at the Oxford Martin School ( email )

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Oxford, OX2 6ED
United Kingdom

University of Bremen ( email )

ierp, FB7
Max von Laue Str. 1
D-28359 Bremen, Bremen 28359
Germany

Jangho Yang

INET & Oxford Martin School ( email )

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

New School for Social Research ( email )

6 East 16th Street
New York, NY 10003
United States

Shuanping Dai

University of Duisburg-Essen - Mercator School of Management ( email )

Lotharstraße 65
Duisburg, Nordrhein-Westfalen 47057
Germany

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