Capital Accumulation, Labor Mobility and Chinese Provincial Return on Capital
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| Title | Capital Accumulation, Labor Mobility and Chinese Provincial Return on Capital
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| Author | Luo Zhi and Guo Xibao |
| Organization | Center of Economics Development Research, Wuhan University |
| Email | luozhi1225@gmail.com,xbguo@whu.edu.cn |
| Key Words | Capital Accumulation; Labor Mobility; Return on Capital |
| Abstract | The return on capital is one of the most important factors that affect the investment and economic growth. This paper constructs a dual-economy model in which the return on capital is of inverse-U shape. The reasons are capital concentration, labor mobility and scale economy. We calculate the Chinese provincial return on capital and use the Chinese provincial data to test the model. The results are:(1) The inverse-U shape of return on capital is evidenced;(2) The return of capital in most Chinese provinces will be higher with the increase of the investment;(3) The scale of industry, the financial index, the proportion of SOE and the development of product market are also the factors which affect the return on capital in China. |
| Serial Number | WP222 |
| Time | 2012-02-16 |
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