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Protectionism and Industry Location in Chinese Provinces

  • Cecile Batisse
  • Sandra Poncet

This paper investigates the determinants of activities' location in Chinese provinces based on a unique panel data set, paying particular attention to the role of local protectionism. We estimate a model of production location across Chinese provinces that combines factor endowments and geographical consideration. Results emphasize that the dynamics of comparative advantages and the forces of the new geographic economy are at work in Chinese provinces. Estimations, however, lend strong support to the role of local protectionism. The location of economic activities in Chinese provinces does thus not exclusively follow the logic of the market.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/14765280410001684797
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Article provided by Taylor & Francis Journals in its journal Journal of Chinese Economic and Business Studies.

Volume (Year): 2 (2004)
Issue (Month): 2 ()
Pages: 133-154

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Handle: RePEc:taf:jocebs:v:2:y:2004:i:2:p:133-154
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  1. Krugman, Paul & Venables, Anthony J., 1995. "Globalization and the Inequality of Nations," Working Paper Series 430, Research Institute of Industrial Economics.
  2. Donald R. Davis & David E. Weinstein, 1998. "Economic geography and regional production structure: an empirical investigation," Staff Reports 40, Federal Reserve Bank of New York.
  3. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 136(2), pages 284-314, June.
  4. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  5. Bai, Chong-En & Du, Yingjuan & Tao, Zhigang & Tong, Sarah Y., 2004. "Local protectionism and regional specialization: evidence from China's industries," Journal of International Economics, Elsevier, vol. 63(2), pages 397-417, July.
  6. Midelfart-Knarvik, K.H. & Overman, H.G. & Venables, A.J., 2000. "Comparative Advantage and Economic Geography: Estimating the Location of Production in the EU," Papers 18/00, Norwegian School of Economics and Business Administration-.
  7. Overman, Henry G & Redding, Stephen J. & Venables, Anthony J, 2001. "The Economic Geography of Trade Production and Income: A Survey of Empirics," CEPR Discussion Papers 2978, C.E.P.R. Discussion Papers.
  8. Mody, Ashoka & Wang, Fang-Yi, 1997. "Explaining Industrial Growth in Coastal China: Economic Reforms . . . and What Else?," World Bank Economic Review, World Bank Group, vol. 11(2), pages 293-325, May.
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