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Does renaming promote economic development? New evidence from a city-renaming reform experiment in China

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  • Guo, Jing
  • Zhang, Zhengyu

Abstract

To explore the impact of city-renaming reform on economic growth, we compare the empirical performance of the synthetic control method, panel data approach and machine learning method (LASSO and elastic net) by the case of Xiangyang, which was officially renamed in 2010. We find that for the data on real GDP growth, the panel data approach reveals the best performance under the criteria of evaluating the quality of a model. The estimation results show that Xiangyang's real GDP growth rate rose by about 1.43% annually after the renaming reform. However, further discussions show that the annual growth rate of the tertiary industry decreased by 1.59%, which contradicts the mechanism of the brand effect of the reform. The statistical inference demonstrates that even if a city did not implement the city-renaming reform in 2010, the probability of obtaining an effect as large as Xiangyang's would be 25.9%. Therefore, the effect of the city-renaming reform is insignificant and other policy interventions—rather than the city-renaming reform—promote economic growth in Xiangyang. In summary, policymakers cannot win a “Promotion Tournament” by renaming cities.

Suggested Citation

  • Guo, Jing & Zhang, Zhengyu, 2019. "Does renaming promote economic development? New evidence from a city-renaming reform experiment in China," China Economic Review, Elsevier, vol. 57(C).
    • Handle: RePEc:eee:chieco:v:57:y:2019:i:c:s1043951x19301051
    DOI: 10.1016/j.chieco.2019.101344
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    Cited by:

    1. Echevarría, Cruz A. & Hasancebi, Serhat & García-Enríquez, Javier, 2022. "Economic Effects of Macao’s Integration with Mainland China: A Causal Inference Study," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 37(2), pages 179-215.
    2. Chen, Xing & Lin, Boqiang, 2021. "Towards carbon neutrality by implementing carbon emissions trading scheme: Policy evaluation in China," Energy Policy, Elsevier, vol. 157(C).

    More about this item

    Keywords

    City-renaming reform; Synthetic control method; Panel data approach; Machine learning method; Treatment effects; Statistical inference;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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