A Vector Error Correction Model (VECM)  Approach in explaining the relationship between Fixed Investment and Economic Growth in Rural China

A Vector Error Correction Model (VECM) Approach in explaining the relationship between Fixed Investment and Economic Growth in Rural China

Nsabimana Leonard

Contact

Khan Humayun

Contact

Zhong Haiyue

Contact

Tang Yunjie

Contact

A Vector Error Correction Model (VECM) Approach in explaining the relationship between Fixed Investment and Economic Growth in Rural China

Article Fingerprint

ReserarchID

DL001

A Vector Error Correction Model (VECM) Approach in explaining the relationship between Fixed Investment and Economic Growth in Rural China Banner

AI TAKEAWAY

Connecting with the Eternal Ground

Abstract

A rural economy can be affected by fixed investment in a rural area positively or negatively. Investment in fixed assets is one of the core measures of capital spending in rural China and the rural economy is a prominent part of china’s national economy. It is important to study the dynamic relationship between fixed investment and economic growth in rural China. Based on time-series data from 1990 to 2016, this paper employed a Vector Error Correction Model (VECM) approach to lead the stationarity test, Cointegration test, stability test, and granger causality test. The result indicated that, in the long term, Fixed Investment fluctuation promotes GDP growth in rural China while GDP fluctuation is not the source of fixed investment increase in rural China.

References

73 Cites in Article

Reference Format

C Adelman,Orris (1973). Economic Growth and Social Equity In Developing Countries.
A Hatemi,M Irandoust (2002). Investigating causal relations between fixed investment and economic growth.
J Arias,J Rubio-Ram_Rez,D Waggoner (2018). Inference based on SVATs identified with a sign and zero restrictions: theory and application.
Manuel Arellano,Olympia Bover (1995). Another look at the instrumental variable estimation of error-components models.
Richard Baillie (1996). Long memory processes and fractional integration in econometrics.
Lawrence Bouton,Mariusz Sumlinski (2000). Trends in private investment in developing countries. No. 41, Statistics for 1970-1998.
Borenstein De Gregorio,J Lee,J (1998). How does a foreign direct investment affect economic growth?.
Niloy Bose,M Haque,Denise Osborn (2007). PUBLIC EXPENDITURE AND ECONOMIC GROWTH: A DISAGGREGATED ANALYSIS FOR DEVELOPING COUNTRIES*.
Magnus Blomström,Robert Lipsey,Mario Zejan (1994). What Explains the Growth of Developing Countries?.
Mario Blejer,Mohsin Khan (1984). Government Policy and Private Investment in Developing Countries (Politique des pouvoirs publics et investissement prive dans les pays en developpement) (Politica estatal e inversion privada en los paises en desarrollo).
Michèle Friend,Gretel Carney,Ella Derke,Morgan Dulude,Nan Jiang,Amelia Shaw,Jacquelyn Steen (2024). Report on the Jalisco Section of the Santiago River Basin. Using the Institutional Compass.
David Canning,Peter Pedroni (2008). INFRASTRUCTURE, LONG‐RUN ECONOMIC GROWTH AND CAUSALITY TESTS FOR COINTEGRATED PANELS.
(2019). China Statistical Yearbook.
S Chong,Poole (2013). Financing Infrastructure: A Spectrum of Country Approaches.
N Cheng (2004). Smallholder economy in Chinese history: Production and life.
Naixing Chen (1999). The Focal Point of Economic Development and Re-employment.
Lawrence Christiano,Martin Eichenbaum,Robert Vigfusson (2006). Alternative Procedures for Estimating Vector Autoregressions Identified with Long-Run Restrictions.
Furen Dong (1999). 绵羊养殖农民田间学校辅导员指导手册.
J De Long,L Summers (1991). Equipment investment and economic growth.
J De Long,L Summers (1993). How strongly do developing economies benefit from equipment investment.
J De Long,Lawrence Summers,Andrew Abel (1992). Equipment Investment and Economic Growth: How Strong is the Nexus?.
William Easterly,Sergio Rebelo (1993). Fiscal policy and economic growth.
Robert Engle,C Granger (1987). Co-Integration and Error Correction: Representation, Estimation, and Testing.
Ronald Findlay (1978). Relative Backwardness, Direct Foreign Investment, and the Transfer of Technology: A Simple Dynamic Model.
Xiaolan Fu,V Balasubramanyam (2003). Township and Village Enterprises in China.
Shangquan Gao (1992). China's Urban System Reforms.
Muqiao Xue (1992). Economic Management Publishing House. 高 1992。高尚全.
C Granger (1980). Testing for causality.
C Granger (1981). Some properties of time series data and their use in econometric model specification.
Joshua Greene,Delano Villanueva (1991). Private Investment in Developing Countries: An Empirical Analysis.
Michèle Friend,Gretel Carney,Ella Derke,Morgan Dulude,Nan Jiang,Amelia Shaw,Jacquelyn Steen (2024). Report on the Jalisco Section of the Santiago River Basin. Using the Institutional Compass.
Søren Johansen (1988). Statistical analysis of cointegration vectors.
Søren Johansen (1992). A Representation of Vector Autoregressive Processes Integrated of Order 2.
Wenxiu Han (1995). Index to Jingji Yanjiu (Economic Research), 1979; JINGJl YANJIU (MONTHLY), No. 1 (January 1979).
Dong He,Wenlang Zhang,Jimmy Shek (2007). HOW EFFICIENT HAS BEEN CHINA'S INVESTMENT? EMPIRICAL EVIDENCE FROM NATIONAL AND PROVINCIAL DATA.
E Hannan,B Quinn (1979). The Determination of the Order of an Autoregression.
Lawrence Bouton,Mariusz Sumlinski (2000). Trends in private investment in developing countries. No. 41, Statistics for 1970-1998.
& Kónya,Singh (2006). Exports, imports, and economic growth in India.
S Knack,P Keefer (1995). Institutions and economic performance: cross-country tests using alternative institutional measures.
Malcolm Knight,Norman Loayza,Delano Villanueva (1993). Testing the Neoclassical Theory of Economic Growth: A Panel Data Approach.
Mohsin Khan,Manmohan Kumar (1997). Public and Private Investment and The Growth Process in Developing Countries.
Denis Kwiatkowski,Peter Phillips,Peter Schmidt,Yongcheol Shin (1992). Testing the null hypothesis of stationarity against the alternative of a unit root.
Jean-Louis Rocca (2008). Zhou Xiaohong, Zhongguo shehui yu zhongguo yanjiu..
Li Shi,Zhao Renwei (1994). The research on the residents' income distribution in China.
Xiaoyan Liang,Shuang Chen (2013). Developing Skills for Economic Transformation and Social Harmony in China: A Study of Yunnan Province.
Robert Looney,Peter Frederiken (1997). Infrastructure and private sector investment in Pakistan.
Jorge Lopes,Les Ruddock,Francisco Ribeiro (2002). Investment in construction and economic growth in developing countries.
Ross Levine (1997). Financial Development and Economic Growth: Views and Agenda.
Angus Maddison,Harry Wu (2007). China's Economic Performance: How Fast has GDP Grown; How Big it is Compared with the USA? Paper prepared for the Hitotsubashi University Institute of Economic Research Workshop on China's Industrial Structure and Economic Growth: A Historical Perspective.
Argiro Moudatsou (2003). Foreign Direct Investment and Economic Growth in the European Union.
Temitope Oshikoya (1994). Macroeconomic Determinants of Domestic Private Investment in Africa: An Empirical Analysis.
Filiz Ozkan,Omer Ozkan,Murat Gunduz (2012). Causal relationship between construction investment policy and economic growth in Turkey.
Elena Podrecca,Gaetano Carmeci (2001). Fixed Investment and Economic Growth: New Results on Causality.
Dwight Perkins (1975). Growth and Changing Structure of China's Twentieth-Century Economy.
Xiaohui Luo,Qiuxia Zhang,Jin Li,Junwu Dang (2005). Development Report on the Quality of Life for the Elderly In China (2019).
Dmitriy Silka (2017). Development of Organizing and Economic Measures for Monitoring the Cost of Construction Resources.
Christopher Sims,James Stock,Mark Watson (1980). Inference in Linear Time Series Models with some Unit Roots.
B Sanchez-Robles (1998). INFRASTRUCTURE INVESTMENT AND GROWTH: SOME EMPIRICAL EVIDENCE.
Rozelle Scott (1994). Rural Industrialization and Increasing Inequality: Emerging Patterns in China's Reforming Economy.
Zheng Song,Kjetil Storesletten,Fabrizio Zilibotti (2011). Growing Like China.
Duo Qin,Marie Cagas,Pilipinas Quising,Xin-Hua He (2006). How much does investment drive economic growth in China?.
Thomas Rawski (1949). China's Industrial Performance.
Thomas Rawski (2001). What is happening to China's GDP statistics?.
(2002). Bhutan : Private Sector Survey.
Li Xing,Shenggen Fan,Xiaopeng Luo,Xiaobo Zhang (2009). Community poverty and inequality in western China: A tale of three villages in Guizhou Province.
Meng Xu,Susan Grant-Muller,Ziyou Gao (2015). Evolution and assessment of economic regulatory policies for expressway infrastructure in China.
Alwyn Young (2003). Gold into Base Metals: Productivity Growth in the People's Republic of China during the Reform Period.
Engle Yoo (1987). Forecasting and Testing in the co-integrated system.
Jin Yang,Zuhui Huang,Xiaobo Zhang,Thomas Reardon (2013). The Rapid Rise of Cross‐Regional Agricultural Mechanization Services in China.
Z Yang,H Shi,L (2014). The strategy prepares for Chinese new urbanization.
H Zhang (1999). FDI and economic growth: evidence from ten East Asian Economies.
Liu Yuan (1949). Kang Zhijie 康志傑, Zhongguo Tianzhujiao caiwu jingji yanjiu (1582–1949) 中國天主教財務經濟研究 (1582–1949) (Financial and Economic Studies of Chinese Catholicism (1582–1949)).
Siqi Zheng,Fenjie Long,C Fan,Yizhen Gu (2009). Urban Villages in China: A 2008 Survey of Migrant Settlements in Beijing.

Download References

Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

How to Cite This Article

Nsabimana Leonard. 2020. \u201cA Vector Error Correction Model (VECM) Approach in explaining the relationship between Fixed Investment and Economic Growth in Rural China\u201d. Global Journal of Human-Social Science - E: Economics GJHSS-E Volume 20 (GJHSS Volume 20 Issue E8): .

More Citation Formats

Select Citation Style:

Download Citation

Download Article

GJHSS Volume 20 Issue E8
Pg. 17- 25

Explore Journals Explore Volume Read This Issue

Journal Specifications

Crossref Journal DOI 10.17406/GJHSS

Print ISSN 0975-587X

e-ISSN 2249-460X

Keywords

Not Found

Classification

GJHSS-E Classification: FOR Code: 149999

Submission ReceivedDecember 6, 2019
Peer Review Double Blind
Handling Editor
Accepted December 31, 2019
Published January 15, 2020

Version of record

v1.2

Issue date

November 23, 2020

Language

Experiance in AR

Explore published articles in an immersive Augmented Reality environment. Our platform converts research papers into interactive 3D books, allowing readers to view and interact with content using AR and VR compatible devices.

View in VR

Read in 3D

Your published article is automatically converted into a realistic 3D book. Flip through pages and read research papers in a more engaging and interactive format.

View in 3D

Article Matrices

Total Views: 2316

Total Downloads: 1120

2026 Trends

Published Article

Our website is actively being updated, and changes may occur frequently. Please clear your browser cache if needed. For feedback or error reporting, please email [email protected]