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The Unbalanced Growth Hypothesis and the Role of the State: The Case of China's State-owned Enterprises

Authors Holz, Carsten A. View this author's profile
Issue Date 2011
Source Journal of development economics , v. 96, (2), November 2011, p. 220-238
Summary Albert Hirschman's unbalanced growth hypothesis suggests that a developing economy can promote economic growth by initially investing in industries with high backward and forward linkages. In the case of Chinese economic policy today, one application would be the continued presence of the state in high-linkage sectors and the strategic withdrawal of the state from low-linkage sectors. The evidence shows that while the degree of linkage plays an important role in generating economic growth in China, province-specific withdrawal strategies for the state sector have no effect on economic growth. (C) 2010 Published by Elsevier B.V.
ISSN 0304-3878
Language English
Format Article
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