Growing like China
Open accessAbstract
We construct a growth model consistent with China's economic transition: high output growth, sustained returns on capital, reallocation within the manufacturing sector, and a large trade surplus. Entrepreneurial firms use more productive technologies, but due to financial imperfections they must finance investments through internal savings. State-owned firms have low productivity but survive because of better access to credit markets. High-productivity firms outgrow low-productivity firms if entrepreneurs have sufficiently high savings. The downsizing of financially integrated firms forces domestic savings to be invested abroad, generating a foreign surplus. A calibrated version of the theory accounts quantitatively for China's economic transition. (JEL E21, E22, E23, F43, L60, O16, O53, P23, P24, P31).
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- Authors
- Song, Z., Storesletten, K., & Zilibotti, F.
- Affiliations
- Chinese University of Hong Kong (HK)
- Federal Reserve Bank of Minneapolis (US)
- University of Zurich (CH)
- ORCID
- Zilibotti, Fabrizio
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2011-02-01
- Volume
- 101
- Issue
- 1
- Pages
- 196-233
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W3121205121
- Cited by
- 1,741
- References
- 79
- Citations by year
- 2026: 147 · 2025: 188 · 2024: 160 · 2023: 141 · 2022: 191 · 2021: 138 · 2020: 97 · 2019: 97 · 2018: 93 · 2017: 86 · 2016: 67 · 2015: 79 · 2014: 81 · 2013: 76 · 2012: 60
- FWCI
- 196.43
- Type
- journal article
- Language
- en
- Open access
- green
- www.zora.uzh.ch
- Licence
- other-oa
- Locations
- American Economic Review (publishedVersion)
- Zurich Open Repository and Archive (University of Zurich) (acceptedVersion, other-oa)
- RePEc: Research Papers in Economics (submittedVersion)
- Zurich Open Repository and Archive (University of Zurich) (submittedVersion, other-oa)
- Zurich Open Repository and Archive (University of Zurich)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Growth and Productivity
- Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Economic Theory and Policy
- Social Sciences › Political Science and International Relations › China's Socioeconomic Reforms and Governance
- Keywords
- Chinese economic transformation, growth models, entrepreneurial firms, state-owned enterprises, financial market imperfections, access to credit, internal savings, foreign direct investment, trade surplus, firm productivity, business survival, return on capital
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