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Institution Distortion, Technical Progress and China’s Economic Growth
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TitleInstitution Distortion, Technical Progress and China’s Economic Growth  
AuthorFu Qiang  
OrganizationSchool of Economics Shandong University 
Key WordsInstitutional Distortion; Market Segmentation; Technical Progress; Sustainable Economic Growth 
AbstractThis paper analyzes technical progress and economic growth under the framework of institutional distortion. We discover that under soft institutional constraints, although local government’s competition in lowering factor’s price can bring rapid economic growth, it also leads to “income effect” and “substitution effect”, which seriously distort the mode of China’s economic growth. What’s worse, market segmentation will results in lock-in effect on technical progress. Empirical research discovers that the economic growth after reformation can be divided into three stages. And after controlling several related variables, we find that there is a significant relationship between institutional distortion and technical progress, so economic growth in China is unsustainable.  
Serial NumberWP44 
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