An Empirical Test on Regional Spillovers through Intra- and International Trade

In my previous publication with a model to illustrate the key role of intra-national trade in developing countries, it was established that intra-national trade, together with international trade, form a network in which high growth achieved by the developed regions spills over to the less developed regions. This study aims at providing econometrical evidence to support this theoretical conjecture. Using China’s 2007 foreign trade data and provincial input-output tables, the key variables on intra- and international imports of technological inputs are made for estimating their impacts over the outputs in production functions at the province and sector levels. It is found that in the less developed regions, intra-national imports rather than international ones made significant contribution to production. In the developed regions, these impacts were just inversed. These results confirm the existence of the trade network in which mainly the former benefited from the spillovers via intra-national trade, while the latter gained this benefit via international trade.