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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.

Suggested Citation

  • Cecile Batisse & Sandra Poncet, 2004. "Protectionism and Industry Location in Chinese Provinces," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 2(2), pages 133-154.
  • Handle: RePEc:taf:jocebs:v:2:y:2004:i:2:p:133-154 DOI: 10.1080/14765280410001684797

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    References listed on IDEAS

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    2. 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-.
    3. Davis, Donald R. & Weinstein, David E., 1999. "Economic geography and regional production structure: An empirical investigation," European Economic Review, Elsevier, vol. 43(2), pages 379-407, February.
    4. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    5. Henry Overman & Stephen Redding & Anthony J. Venables, 2001. "The Economic Geography of Trade, Production, and Income: A Survey of Empirics," CEP Discussion Papers dp0508, Centre for Economic Performance, LSE.
    6. 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.
    7. Keith Head & Thierry Mayer, 2000. "Non-Europe: The magnitude and causes of market fragmentation in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(2), pages 284-314, June.
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    9. 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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    Cited by:

    1. Liu, Zhu & Geng, Yong & Lindner, Soeren & Guan, Dabo, 2012. "Uncovering China’s greenhouse gas emission from regional and sectoral perspectives," Energy, Elsevier, vol. 45(1), pages 1059-1068.
    2. Grether, Jean-Marie & Hotz, Irina & Mathys, Nicole A., 2014. "Industry location in Chinese provinces: Does energy abundance matter?," Energy Economics, Elsevier, vol. 44(C), pages 383-391.
    3. Christopher Edmonds & Sumner J. La Croix & Yao Li, 2006. "The China's Rise as an International Trading Power," Economics Study Area Working Papers 88, East-West Center, Economics Study Area.
    4. Y Wei & X Liu, 2006. "Productivity spillovers from R&D, exports and FDI in China's manufacturing sector," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(4), pages 544-557, July.
    5. Viswanathan P K, 2008. "Critical Issues Facing China’s Rubber Industry in the Era of Market Integration: An Analysis in Retrospect and Prospect," Working Papers id:1362, eSocialSciences.
    6. Zheng, Jinghai & Bigsten, Arne & Hu, Angang, 2009. "Can China's Growth be Sustained? A Productivity Perspective," World Development, Elsevier, vol. 37(4), pages 874-888, April.
    7. Li, Yao, 2008. "Industrial Agglomeration and Wage Inequality in China," MPRA Paper 11426, University Library of Munich, Germany, revised Oct 2008.
    8. Prud’homme, Dan, 2016. "Dynamics of China’s provincial-level specialization in strategic emerging industries," Research Policy, Elsevier, vol. 45(8), pages 1586-1603.
    9. Maurice Catin & Christophe Van Huffel, 2004. "Ouverture économique et inégalités régionales de développement en Chine : le rôle des institutions," Mondes en développement, De Boeck Université, vol. 128(4), pages 7-23.


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