Reducing Regional Disparities In China: Is Investment Allocation Policy Effective?
AbstractInter-regional disparities in China have been an important concern for central-government policy-makers for most of the past 60 years. One of the main policy instruments for redressing the balance between the prosperous coastal region and the poorer inland region has been the allocation of investment spending. Yet there is little empirical work evaluating the response of disparities to changes in the regional distribution of investment. We help fill this gap and analyse the two-way relationship between these variables within a VAR/VECM framework, the results of which we tentatively interpret in terms of a simple demand model. We find, surprisingly, that changes in the regional allocation of investment have only a modest positive effect on inter-regional output disparities while the effect in the opposite direction is also positive but much larger. The effects of investment on output are larger, though, for the post-1978 period. We find our overall results to be robust to numerous variations in variable definition.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number 11-08.
Length: 44 pages
Date of creation: 2011
Date of revision:
Contact details of provider:
Postal: 35 Stirling Highway, Crawley, W.A. 6009
Phone: (08) 9380 2918
Fax: (08) 9380 1016
Web page: http://www.business.uwa.edu.au/school/disciplines/economics
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-25 (All new papers)
- NEP-GEO-2011-06-25 (Economic Geography)
- NEP-TRA-2011-06-25 (Transition Economics)
- NEP-URE-2011-06-25 (Urban & Real Estate Economics)
You can help add them by filling out this form.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shane Standley).
If references are entirely missing, you can add them using this form.