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Evaluating China's road to prosperity: A new economic geography approach

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Author Info

  • Roberts, Mark
  • Deichmann, Uwe
  • Fingleton, Bernard
  • Shi, Tuo

Abstract

Over the last two decades, China has embarked on an ambitious program of expressway network expansion. By facilitating market integration, this program aims to promote efficiency at the national level and contribute to the catch-up of lagging inland regions. This paper evaluates the short-run aggregate and spatial economic impacts of network expansion. We adopt a counterfactual approach based on the hybrid estimation–calibration of a structural ‘new economic geography’ model. Overall, we find that aggregate Chinese real income was approximately 6% higher than it would have been in 2007 had the expressway network not been built, although this does not take into account the opportunity costs associated with expenditure on the network. Although there is considerable heterogeneity in the results, we find no significant reduction in disparities across prefectures and no reduction in urban–rural disparities. If anything, the expressway network appears to have reinforced existing patterns of spatial inequality; although, over time, these will likely be reduced by enhanced migration.

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Bibliographic Info

Article provided by Elsevier in its journal Regional Science and Urban Economics.

Volume (Year): 42 (2012)
Issue (Month): 4 ()
Pages: 580-594

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Handle: RePEc:eee:regeco:v:42:y:2012:i:4:p:580-594

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Web page: http://www.elsevier.com/locate/regec

Related research

Keywords: China; Transport infrastructure; Economic geography;

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References

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Citations

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Cited by:
  1. Li, Chao & Gibson, John, 2013. "Rising Regional Inequality in China: Fact or Artifact?," World Development, Elsevier, vol. 47(C), pages 16-29.
  2. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "The golden quadrilateral highway project and urban/rural manufacturing in India," Policy Research Working Paper Series 6620, The World Bank.
  3. Ejaz Ghani & Arti Grover Goswami & William R. Kerr, 2012. "Highway to Success: The Impact of the Golden Quadrilateral Project for the Location and Performance of Indian Manufacturing," NBER Working Papers 18524, National Bureau of Economic Research, Inc.
  4. Winters, L. Alan, 2014. "Globalization, Infrastructure, and Inclusive Growth," ADBI Working Papers 464, Asian Development Bank Institute.
  5. Kym Anderson & Anna Strutt, 2014. "Food security policy options for China: lessons from other countries," Departmental Working Papers 2014-11, The Australian National University, Arndt-Corden Department of Economics.
  6. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "Highway to success in India : the impact of the golden quadrilateral project for the location and performance of manufacturing," Policy Research Working Paper Series 6320, The World Bank.
  7. Ghani, Ejaz & Goswami, Arti Grover & Kerr, William R., 2013. "Highways and Spatial Development," World Bank - Economic Premise, The World Bank, issue 131, pages 1-6, December.

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