Externalities in Rural Development: Evidence for China
AbstractThe author tests for external effects of local economic activity on consumption and income growth at the farm-household level using panel data from four provinces of post-reform rural China. The tests allow for non-stationary fixed effects in the consumption growth process. Evidence is found of geographic externalities, stemming from spillover effects of the level and composition of local economic activity and private returns to local human and physical infrastructure endowments. The results suggest an explanation for rural underdevelopment arising from under-investment in certain externality-generating activities, of which agricultural development emerges as the most important.
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Bibliographic InfoPaper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper DP2003/54.
Length: 28 pages
Date of creation: 2003
Date of revision:
consumption growth; income growth; externalities; panel data; rural China;
Other versions of this item:
- Ravallion, Martin, 2002. "Externalities in rural development - evidence for China," Policy Research Working Paper Series 2879, The World Bank.
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