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Place-based policies, state-led industrialisation, and regional development: Evidence from China's Great Western Development Programme

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  • Jia, Junxue
  • Ma, Guangrong
  • Qin, Cong
  • Wang, Liyan

Abstract

This study evaluates the effects of a prominent place-based policy in China—the Great Western Development Programme. In 2000, China's central government targeted inland provinces in Western China for considerable investment and preferential treatment to accelerate their industrialisation. Using a spatially discontinuous design, we find that the programme has succeeded in accelerating industrialisation, raising the annual GDP growth rate by 1.6 percentage points in the targeted regions. However, no such effects are observed on nonfarm employment or wages. Moreover, the GDP growth effects primarily result from massive physical investment rather than the growth of total factor productivity.

Suggested Citation

  • Jia, Junxue & Ma, Guangrong & Qin, Cong & Wang, Liyan, 2020. "Place-based policies, state-led industrialisation, and regional development: Evidence from China's Great Western Development Programme," European Economic Review, Elsevier, vol. 123(C).
    • Handle: RePEc:eee:eecrev:v:123:y:2020:i:c:s0014292120300301
    DOI: 10.1016/j.euroecorev.2020.103398
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    More about this item

    Keywords

    Place-based policy; Industrialisation; Regional development;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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