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Spillover Effect Of Infrastructure And Regional Gap In China

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  • Bihong HUANG
  • Feng DING
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    Abstract

    Infrastructure provision in backward areas has been proposed by many studies as a cure for widening income gaps in developing countries like China. However, little has been said regarding infrastructure’s role as an unpaid production factor or the issue of optimal resource allocation. This paper examines the efficiency side of infrastructure provision in different Chinese provinces and its spillover effect on the non-infrastructure sector with an adapted dual-sector model. Our findings suggest that while the spillover effect on non-infrastructure sector is considerable across different Chinese regions, non-optimality of resource allocation still exists in regional attempts of developing public facilities.

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    Bibliographic Info

    Article provided by Euro-American Association of Economic Development in its journal Applied Econometrics and International Development.

    Volume (Year): 9 (2009)
    Issue (Month): 2 ()
    Pages:

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    Handle: RePEc:eaa:aeinde:v:9:y:2009:i:2_18

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    Related research

    Keywords: Dual-sector model; Infrastructure; Regional gap; Spillover effect;

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    References

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    1. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    2. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
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    8. Demurger, Sylvie, 2001. "Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 95-117, March.
    9. Martin Raiser, 1998. "Subsidising inequality: Economic reforms, fiscal transfers and convergence across Chinese provinces," The Journal of Development Studies, Taylor and Francis Journals, vol. 34(3), pages 1-26.
    10. Feder, Gershon, 1983. "On exports and economic growth," Journal of Development Economics, Elsevier, vol. 12(1-2), pages 59-73.
    11. Aghion, Philippe & Schankerman, Mark, 2000. "A Model Of Market-Enhancing Infrastructure," CEPR Discussion Papers 2462, C.E.P.R. Discussion Papers.
    12. Acconcia, Antonio, 2000. "On growth and infrastructure provision," Research in Economics, Elsevier, vol. 54(2), pages 215-234, June.
    13. Esfahani, Hadi Salehi & Ramirez, Maria Teresa, 2003. "Institutions, infrastructure, and economic growth," Journal of Development Economics, Elsevier, vol. 70(2), pages 443-477, April.
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