Provincial Return to Capital and Overcapitalization
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| Title | Provincial Return to Capital and Overcapitalization
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| Author | Bai Peiwen and Xu Jie |
| Organization | School of Economics, Xiamen University |
| Email | bpw_888@163.com，ainiao120@126.com |
| Key Words | Without Uncertainty; Return to Capital; The Varying Coefficient Model; Overinvestment |
| Abstract | To measure whether China has overinvested or not, this paper indicates the potential shortage of the return to capital recommended in many former researches. We construct our model through the three steps combined with the varying coefficient model based on the panel data of 29 provinces in China from 1993 to 2013. Many conclusions can be reached, first the concept of return of capital without uncertainty is better than the return to capital; second the capital of return higher than 20 percent has been overestimated; third there is a similar trend of return to capital among regions contrast with the increasing significant differences in absolute value which bears a “inverse U” shape. forth national over-investment should not be worried too much, however regional over-investment should be taken seriously. |
| Serial Number | WP1066 |
| Time | 2016-05-31 |
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