Next Article in Journal
Checks and Balances: Enforcing Constitutional Constraints
Previous Article in Journal
How Much Does Economic Growth Contribute to Child Stunting Reductions?
Open AccessArticle

The Effect of Governance Quality on Economic Growth: Based on China’s Provincial Panel Data

1
School of Economics and Management, Harbin Institute of Technology (Shenzhen), Shenzhen 518055, China
2
School of Finance, Shanghai University of Finance and Economics, Shanghai 200433, China
*
Authors to whom correspondence should be addressed.
Economies 2018, 6(4), 56; https://doi.org/10.3390/economies6040056
Received: 11 July 2018 / Revised: 8 October 2018 / Accepted: 15 October 2018 / Published: 19 October 2018
This paper investigates the impact of governance quality on economic growth in China. After developing a theoretical framework for the effect of governance quality on local economic growth, this article studies the panel data in provincial regions over the period 2001–2015 by constructing a new comprehensive index of provincial governance, and checks the robustness of the empirical findings from four aspects. The results show that governance quality has a positive effect on economic growth, due to good governance strengthening the “helping hand” or weakening the “grabbing hand” of power. Governance quality presents diminishing marginal returns, which means that the high-speed economic growth effect becomes less and less, while the high-quality economic development effect becomes more and more. Higher governance quality could bring a high-speed economic growth effect in the western region, while higher governance quality could bring a high-quality economic development effect in the eastern region. Compared with fixed-asset investment, human capital has played a more important role in economic growth. In order to promote the sustainable development of China’s economy, policy makers should improve local governance quality, strengthen the capacity of independent innovation, and promote the accumulation of high-quality human capital. View Full-Text
Keywords: good governance; provincial governance; diminishing marginal returns; high-speed economic growth effect; high-quality economic development effect; endogeneity; region difference; robustness check good governance; provincial governance; diminishing marginal returns; high-speed economic growth effect; high-quality economic development effect; endogeneity; region difference; robustness check
Show Figures

Figure 1

MDPI and ACS Style

Liu, J.; Tang, J.; Zhou, B.; Liang, Z. The Effect of Governance Quality on Economic Growth: Based on China’s Provincial Panel Data. Economies 2018, 6, 56.

Show more citation formats Show less citations formats
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Article Access Map by Country/Region

1
Back to TopTop