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Local Protectionism and Regional Specialization: Evidence from China’s Industries

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Author Info
Chong-En Bai ()
Yingjuan Du ()
Zhigang Tao ()
Sarah Y. Tong ()

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Abstract

This paper uses a dynamic panel estimation method to investigate the determinants of regional specialization in China’s industries, paying particular attention to local protectionism. Less geographic concentration is found in industries where the past tax-plus-profit margins and the shares of state ownership are high, re- flecting stronger local government protection of these industries. The evidence also supports the scale-economies theory of regional specialization. Finally, the overall time trend of regional specialization of China’s industries is found to have reversed an early drop in the mid 1980s, and registered a significant increase in the later years.

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File URL: http://www.wdi.umich.edu/files/Publications/WorkingPapers/wp565.pdf
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Publisher Info
Paper provided by William Davidson Institute at the University of Michigan Stephen M. Ross Business School in its series William Davidson Institute Working Papers Series with number 2003-565.

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Length: 35 pages
Date of creation: 26 Jun 2003
Date of revision:
Handle: RePEc:wdi:papers:2003-565

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Related research
Keywords: local protectionism; regional specialization; scale economy; external economy.;

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Find related papers by JEL classification:
F1 - International Economics - - Trade
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
P2 - Economic Systems - - Socialist Systems and Transition Economies

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    Other versions:
  3. Raaj Kumar Sah & Joseph E. Stiglitz, 1984. "The Economics of Price Scissors," NBER Working Papers 1156, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  4. Guy Dumais & Glenn Ellison & Edward L. Glaeser, 2002. "Geographic Concentration As A Dynamic Process," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 193-204, May. [Downloadable!] (restricted)
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  5. Bai, Chong-En & Li, David D. & Tao, Zhigang & Wang, Yijiang, 2000. "A Multitask Theory of State Enterprise Reform," Journal of Comparative Economics, Elsevier, vol. 28(4), pages 716-738, December. [Downloadable!] (restricted)
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  8. O'Connell, Paul G. J. & Wei, Shang-Jin, 2002. ""The bigger they are, the harder they fall": Retail price differences across U.S. cities," Journal of International Economics, Elsevier, vol. 56(1), pages 21-53, January. [Downloadable!] (restricted)
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  10. Rauch James E., 1993. "Productivity Gains from Geographic Concentration of Human Capital: Evidence from the Cities," Journal of Urban Economics, Elsevier, vol. 34(3), pages 380-400, November. [Downloadable!] (restricted)
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  11. Gordon H. Hanson, 2000. "Scale Economies and the Geographic Concentration of Industry," NBER Working Papers 8013, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-99, June. [Downloadable!] (restricted)
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  13. Bacchetta, Philippe & Rose, Andrew K. & van Wincoop, Eric, 2001. "Intranational Economics and International Economics," Journal of International Economics, Elsevier, vol. 55(1), pages 1-1, October. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Lee Branstetter, 2006. "China's Embrace of Globalisation," Working Papers id:640, esocialsciences.com. [Downloadable!]
  2. Amiti, Mary & Smarzynska Javorcik, Beata, 2005. "Trade Costs and Location of Foreign Firms in China," CEPR Discussion Papers 4978, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  3. Chun-Yu Ho & Dan Li, 2007. "Catching Up or Falling Behind? Income Distribution of Chinese Cities," Boston University - Department of Economics - Working Papers Series WP2007-22, Boston University - Department of Economics. [Downloadable!]
  4. Lee Branstetter & Nicholas Lardy, 2006. "China's Embrace of Globalization," NBER Working Papers 12373, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Sandra Poncet, 2004. "A Fragmented China," Tinbergen Institute Discussion Papers 04-103/2, Tinbergen Institute. [Downloadable!]
  6. Lu, Jiangyong & Tao, Zhigang, 2007. "Trends and Determinants of China’s Industrial Agglomeration," MPRA Paper 6597, University Library of Munich, Germany. [Downloadable!]
  7. Ge, Ying, 2006. "Regional Inequality, Industry Agglomeration and Foreign Trade: The Case of China," Working Papers RP2006/105, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  8. Zhang, Xiaobo & Tan, Kong-Yam, 2007. "Incremental Reform and Distortions in China’s Product and Factor Markets," MPRA Paper 6804, University Library of Munich, Germany. [Downloadable!]
    Other versions:
  9. Zhang, Xiaobo & Tan, Kong-Yam, 2004. "Blunt to sharpened razor," DSGD discussion papers 13, International Food Policy Research Institute (IFPRI). [Downloadable!]
  10. Krug, B. & Zhu, Z. & Hendrischke, H., 2004. "China’s emerging tax regime: Devolution, fiscal federalism, or tax farming?," Research Paper ERS-2004-113-ORG Revision, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus Uni. [Downloadable!]
  11. Cécile Batisse & Sandra Poncet, 2004. "Protectionism and Industry Location in Chinese Provinces," Journal of Chinese Economic and Business Studies, Taylor and Francis Journals, vol. 2(2), pages 133-154, May. [Downloadable!] (restricted)
  12. Julan Du & Yi Lu & Zhigang Tao, 2008. "FDI location choice: agglomeration vs institutions," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 13(1), pages 92-107. [Downloadable!]
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