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Globalisation and the provinces of China: the role of domestic versus international trade integration

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  • Arne Melchior
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    Abstract

    Regional disparities are particularly high in some larger emerging economies, such as Russia and China, and inter-provincial inequality in China has increased rapidly after 1990. In the literature, a statistical link between globalisation and increased regional disparities in China has been established, but not the precise mechanisms and causal relationships. In the paper, we therefore simulate a world trade model with 166 countries and regions in order to shed light on these mechanisms and the future development of regional disparities in China. Our results suggest that the faster growth in coastal regions may be caused by the role of these regions as transport hubs for international trade. However, uneven growth could also be caused by domestic trade disintegration, as suggested by some other research. In the paper, we demonstrate these mechanisms, but we are not able to draw firm conclusions about the relative role each of them play empirically. The weaker development for some peripheral regions can be reversed by stronger domestic trade integration or better cross-border infrastructure.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/14765284.2010.493639
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Journal of Chinese Economic and Business Studies.

    Volume (Year): 8 (2010)
    Issue (Month): 3 ()
    Pages: 227-252

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    Handle: RePEc:taf:jocebs:v:8:y:2010:i:3:p:227-252

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    Related research

    Keywords: trade; globalisation; regional development; economic integration;

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    Cited by:
    1. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.

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