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This paper applies Jones' test for the empirical validity of AK-type models to the Chinese economy over the period 1952-2006 (Jones C. I., Quarterly Journal of Economics, 110, 1995a, 495-525). We aim to establish whether large permanent movements in the physical investment rate cause permanent movements in output growth. The evidence indicates that the one-sector AK model cannot be rejected. We also find that augmenting the model to allow for transitional dynamics-via imbalances in factor endowments, structural transformation, and R&D-based technology transfer-does a better job in describing China's growth dynamics than the basic AK model. ( JEL C22, O41, O47) [ABSTRACT FROM AUTHOR]

Importing capital inputs has been recognized as a critical channel for technology transfer across countries. We examine whether and to what extent the productive impact of imported capital varies with firms' abilities to absorb new technologies using ordinary least squares, instrumental variable, and threshold regression estimators. We find that firms with higher absorptive capacity gain significantly more from importing foreign capital. Our results also suggest a threshold for such benefits. Furthermore, the productive contribution of skilled labor is significantly higher in firms that import foreign capital. Developing policies to augment absorptive capacity will help firms in developing countries to realize benefits associated with imported capital. [ABSTRACT FROM AUTHOR]

Although industrialization first occurred in England, it is thought that China, not England, may have been the world leader in technology at the time. Yet, China did not industrialize until 150 yr after England and nearly a century after less advanced European countries. This represents a puzzle because two-sector neoclassical growth models, such as Hansen and Prescott (2002) , that accurately match industrialization, require that more technologically advanced countries industrialize at an earlier date. I find that a model that accounts for cross-country heterogeneities in population density accurately predicts the timing of industrialization in China. ( JEL F43, N10, N30, O11, O14, O41) [ABSTRACT FROM AUTHOR]