The Effect of Economic Reform and Industrial Policy in a Panel of Chinese Cities
AbstractWe use the establishment of Special Economic Zones in China to estimate the effect of economic reforms on GDP. A panel of 270 Chinese cities from 1988 to 2010 allows us to exploit the variation in the establishment of zones across time and space. The results from our baseline fixed effects specification suggest that the establishment of a major zone led to an increase in the level of GDP between 6% and 10%, depending on the type of zone. This result is similar in a sub-sample of inland provinces, where the selection of cities in which zones were established was more transparent. Decomposing GDP into physical capital, efficient labor, and TFP shows that the effect of the zones went mainly through the accumulation of physical capital. Using electricity consumption and light intensity as two alternative measures for economic activity partly confirms these results.
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2013 Meeting Papers with number 1309.
Date of creation: 2013
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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Other versions of this item:
- Simon Alder & Lin Shao & Fabrizio Zilibotti, 2012. "The Effect of Economic Reform and Industrial Policy in a Panel of Chinese Cities," DEGIT Conference Papers c017_061, DEGIT, Dynamics, Economic Growth, and International Trade.
- E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O25 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
- P27 - Economic Systems - - Socialist Systems and Transition Economies - - - Performance and Prospects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-11 (All new papers)
- NEP-GER-2014-04-11 (German Papers)
- NEP-URE-2014-04-11 (Urban & Real Estate Economics)
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