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Regional Heterogeneity and China’s International Trade: Sufficient Lumpiness or Not?

Author

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  • Meng Lu
  • Chris Milner
  • Zhihong Yu

Abstract

This paper explores whether there is sufficient lumpiness or heterogeneity in the relative endowments (capital, labour and skills) of the regions of China to affect China’s specialization and trade patterns. It does so using both the lens condition to identify the violation of factor price equalization across regions, and direct evidence on regional trade and specialization. The results are sensitive to the level of regional aggregation. The paper concludes, however, that China was sufficiently lumpy as recently as 2004 to affect it pattern of international trade.

Suggested Citation

  • Meng Lu & Chris Milner & Zhihong Yu, 2009. "Regional Heterogeneity and China’s International Trade: Sufficient Lumpiness or Not?," Discussion Papers 09/09, University of Nottingham, GEP.
    • Handle: RePEc:not:notgep:09/09
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    File URL: https://www.nottingham.ac.uk/gep/documents/papers/2009/09-09.pdf
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    Keywords

    Trade; lumpiness; regions; China;
    All these keywords.

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