Job Market Paper:
"Human Capital, Foreign Direct Investment and Economic Growth: Evidence from China"
In this paper, I use the yearly panel data of 31 provinces in China from 2005 to 2019 to explore the dynamic relationship between human capital, foreign direct
investment (FDI) and economic growth. Human capital and FDI are generally regarded as the origins of economic growth. Using the increasing rate of real
income per capita as the measure of economic growth and the panel vector autoregressive (PVAR) method, I argue that a shock to human capital produces a significantly positive impact on economic growth and FDI. Higher economic growth has a significantly positive impact on both human capital and FDI. A shock to FDI has a significantly positive impact on human capital and economic growth. I also provide the heterogenous analysis by dividing the full sample into three regions of China: eastern, central and western regions. (1): The impact of human capital on real income per capita and FDI is significantly positive in the western region, however, the impact of human capital is insignificant in the eastern and central regions. (2): The impact of real income per capita growth on human capital and FDI is significantly positive for all three regions. The impact of economic growth on human capital is relative larger in the central region than in the eastern and western regions. (3): The impact of FDI on human capital and real income per capita is significantly positive for the most developed eastern region, however, the impact of FDI on human capital and real income per capita is insignificant for both less developed central and western regions. Through the analysis of this paper, I contribute to the literature on the interrelationships between human capital, FDI and economic growth.
Other Research Papers:
“Global financial risk, financial market and economic growth: Evidence from China”
This paper investigates the dynamic endogenous relationships between global financial risk, financial market and economic growth in China by using a panel VAR method with a panel data of 30 Chinese provinces between the period of 1996Q1 to 2015Q4. Using M2, foreign direct investment (FDI) and stock market values as the variables of the financial market, I argue that one standard deviation to global financial risk produces a significantly positive impact on M2, stock market values and credit. One shock to global financial risk exerts an insignificant impact on FDI, however, produces a significantly negative impact on economic growth. I also provide heterogeneity analysis by dividing the full sample into eastern, central and western regions. The impulse response functions show that global financial risk produces an insignificant impact on the economic growth of more developed eastern region, while, produces an significantly negative impact on the economic growth of less developed central and western regions.
“China’s inequality and economic growth”
In this paper, I use the yearly panel data of 22 provinces in China from 1998 to 2010 to explore the dynamic relationship between income inequality and economic growth using a panel VAR method. I show that higher income inequality leads to lower economic growth and supporting the view that in high and middle income countries, higher inequality hurts economic growth. I also show that higher economic growth leads to lower income inequality. By adding human capital to the baseline model, I find that higher inequality hurts economic growth by lowering capital accumulation in an economy with credit market imperfection. Also, Higher human capital accumulation leads to a lower income inequality.
"Human Capital, Foreign Direct Investment and Economic Growth: Evidence from China"
In this paper, I use the yearly panel data of 31 provinces in China from 2005 to 2019 to explore the dynamic relationship between human capital, foreign direct
investment (FDI) and economic growth. Human capital and FDI are generally regarded as the origins of economic growth. Using the increasing rate of real
income per capita as the measure of economic growth and the panel vector autoregressive (PVAR) method, I argue that a shock to human capital produces a significantly positive impact on economic growth and FDI. Higher economic growth has a significantly positive impact on both human capital and FDI. A shock to FDI has a significantly positive impact on human capital and economic growth. I also provide the heterogenous analysis by dividing the full sample into three regions of China: eastern, central and western regions. (1): The impact of human capital on real income per capita and FDI is significantly positive in the western region, however, the impact of human capital is insignificant in the eastern and central regions. (2): The impact of real income per capita growth on human capital and FDI is significantly positive for all three regions. The impact of economic growth on human capital is relative larger in the central region than in the eastern and western regions. (3): The impact of FDI on human capital and real income per capita is significantly positive for the most developed eastern region, however, the impact of FDI on human capital and real income per capita is insignificant for both less developed central and western regions. Through the analysis of this paper, I contribute to the literature on the interrelationships between human capital, FDI and economic growth.
Other Research Papers:
“Global financial risk, financial market and economic growth: Evidence from China”
This paper investigates the dynamic endogenous relationships between global financial risk, financial market and economic growth in China by using a panel VAR method with a panel data of 30 Chinese provinces between the period of 1996Q1 to 2015Q4. Using M2, foreign direct investment (FDI) and stock market values as the variables of the financial market, I argue that one standard deviation to global financial risk produces a significantly positive impact on M2, stock market values and credit. One shock to global financial risk exerts an insignificant impact on FDI, however, produces a significantly negative impact on economic growth. I also provide heterogeneity analysis by dividing the full sample into eastern, central and western regions. The impulse response functions show that global financial risk produces an insignificant impact on the economic growth of more developed eastern region, while, produces an significantly negative impact on the economic growth of less developed central and western regions.
“China’s inequality and economic growth”
In this paper, I use the yearly panel data of 22 provinces in China from 1998 to 2010 to explore the dynamic relationship between income inequality and economic growth using a panel VAR method. I show that higher income inequality leads to lower economic growth and supporting the view that in high and middle income countries, higher inequality hurts economic growth. I also show that higher economic growth leads to lower income inequality. By adding human capital to the baseline model, I find that higher inequality hurts economic growth by lowering capital accumulation in an economy with credit market imperfection. Also, Higher human capital accumulation leads to a lower income inequality.