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Determinants of Economic Growth and Spread-backwash Effects in Western and Eastern China


  • Shanzi Ke


This paper comparatively assesses the major contributors to economic growth and spread-backwash effects in Western and Eastern China over the period 2000-2007. The empirical findings indicate that economies in both regions increasingly agglomerated in large cities; the marginal products of domestic capital and labor in the western region were, respectively, two-thirds and half of those in the eastern region; FDI was more productive than domestic capital. Spatial econometric analysis reveals that the central cities in Western China had mild spread effects on each other and backwash effects on the nearby rural counties and, in contrast, the central cities in the eastern region competed with each other and had backwash effects on nearby rural counties but spread effects on neighboring county-level cities. The paper draws several policy implications in relation to the improvement of factor inputs and construction of growth centers in the western region. Copyright 2010 The Author. Journal compilation 2010 East Asian Economic Association and Blackwell Publishing Ltd..

Suggested Citation

  • Shanzi Ke, 2010. "Determinants of Economic Growth and Spread-backwash Effects in Western and Eastern China," Asian Economic Journal, East Asian Economic Association, vol. 24(2), pages 179-202, June.
  • Handle: RePEc:bla:asiaec:v:24:y:2010:i:2:p:179-202

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    References listed on IDEAS

    1. Edwards, Sebastian & Vegh, Carlos A., 1997. "Banks and macroeconomic disturbances under predetermined exchange rates," Journal of Monetary Economics, Elsevier, vol. 40(2), pages 239-278, October.
    2. Acemoglu, Daron & Johnson, Simon & Robinson, James & Thaicharoen, Yunyong, 2003. "Institutional causes, macroeconomic symptoms: volatility, crises and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 49-123, January.
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    4. Carmen M. Reinhart, 1995. "Devaluation, Relative Prices, and International Trade: Evidence from Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 42(2), pages 290-312, June.
    5. Ahmed, Shaghil, 2003. "Sources of economic fluctuations in Latin America and implications for choice of exchange rate regimes," Journal of Development Economics, Elsevier, vol. 72(1), pages 181-202, October.
    6. Raddatz, Claudio, 2007. "Are external shocks responsible for the instability of output in low-income countries?," Journal of Development Economics, Elsevier, vol. 84(1), pages 155-187, September.
    7. Deaton, Angus & Miller, Ron, 1996. "International Commodity Prices, Macroeconomic Performance and Politics in Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 5(3), pages 99-191, October.
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    Cited by:

    1. Domènec Melé & Antonio Argandoña & Carlos Sanchez-Runde, 2011. "Facing the Crisis: Toward a New Humanistic Synthesis for Business," Journal of Business Ethics, Springer, vol. 99(1), pages 1-4, March.
    2. Jiang, Crystal X. & Yang, Qin & Li, Sali & Wang, Yong, 2011. "The moderating effect of foreign direct investment intensity on local firms' intangible resources investment and performance implications: A case from China," Journal of International Management, Elsevier, vol. 17(4), pages 291-302.
    3. repec:gam:jsusta:v:10:y:2018:i:2:p:451-:d:131032 is not listed on IDEAS
    4. José Villaverde & Adolfo Maza, 2012. "Chinese per Capita Income Distribution, 1992–2007: A Regional Perspective," Asian Economic Journal, East Asian Economic Association, vol. 26(4), pages 313-331, December.

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