We study the application of the Solow growth model in China's non-governmental businesses and propose a reasonable modification for it. Our analysis indicates that business experience is closely tied to the output of China's non-governmental businesses. Our major findings include: (1) the business experience has little overall impact on the elasticity of output with respect to labour; (2) the business experience has a large impact on the elasticity of output with respect to capital and the elasticity increases as the business experience increases; (3) the adjusted Solow residual that reflects technological progress exhibits a negative relationship with the business experience, indicating that a newly established business tends to have higher technology content than others.
Economics | Growth and Development | International Business
Applied Economics Letters
Taylor & Francis (Routledge): SSH Titles
Business output and business experience — Evidence from China's nongovernmental businesses. (2007). Applied Economics Letters. 14, (3), 227-231. Research Collection School Of Economics.
Available at: http://ink.library.smu.edu.sg/soe_research/1996
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