Business output and business experience: Evidence from China's nongovernmental businesses

• Main Author: SU, Liangjun
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2007
• Subjects: business cycle; capital; economic analysis; economic growth; labor; technological development; China; Asian Studies; Economics; Growth and Development; International Business
• Online Access: https://ink.library.smu.edu.sg/soe_research/1996; https://ink.library.smu.edu.sg/context/soe_research/article/2995/viewcontent/Business_output_China_NGB_2007.pdf
• Institution: Singapore Management University

We study the application of the Solow growth model in China's non-governmental businesses and propose a reasonable modification for it. Our analysis indicates that business experience is closely tied to the output of China's non-governmental businesses. Our major findings include: (1) the business experience has little overall impact on the elasticity of output with respect to labour; (2) the business experience has a large impact on the elasticity of output with respect to capital and the elasticity increases as the business experience increases; (3) the adjusted Solow residual that reflects technological progress exhibits a negative relationship with the business experience, indicating that a newly established business tends to have higher technology content than others.