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Regional Output Spillovers in China: Estimates from a VAR Model

  • Nicolaas Groenewold

    ()

    (Department of Economics, The University of Western Australia)

  • Guoping Lee

    (School of Economics and Finance, Xi'an Jiaotong University)

  • Anping Chen

    (School of Economics and Finance, Xi'an Jiaotong University)

Interregional spillover effects are central to China’s growth policy; yet relatively little is known about the strength and duration of these spillovers and whether their characteristics have changed over time. This paper examines the spillover of output between the three commonly-used regions of China: coastal, central and western regions. We find that there are strong spillovers from the coastal region to both other regions, from the central region to the western region but that shocks to the western region have no flow-on effect for the other two regions. Thus a policy of developing the coastal region is likely to indirectly benefit the other two regions.

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File URL: http://www.biz.uwa.edu.au/home/research/discussionworking_papers/economics/2005?f=148856
File Function: First version, 2005
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Paper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number 05-05.

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Length: 30 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:uwa:wpaper:05-05
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  1. Brian A. Cromwell, 1992. "Does California drive the West? an econometric investigation of regional spillovers," Economic Review, Federal Reserve Bank of San Francisco, pages 13-23.
  2. Cai, Fang & Wang, Dewen & Du, Yang, 2002. "Regional disparity and economic growth in China: The impact of labor market distortions," China Economic Review, Elsevier, vol. 13(2-3), pages 197-212.
  3. Carlino Gerald & Defina Robert, 1995. "Regional Income Dynamics," Journal of Urban Economics, Elsevier, vol. 37(1), pages 88-106, January.
  4. Chang, Gene H., 2002. "The cause and cure of China's widening income disparity," China Economic Review, Elsevier, vol. 13(4), pages 335-340, December.
  5. Cooley, Thomas F. & Leroy, Stephen F., 1985. "Atheoretical macroeconometrics: A critique," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 283-308, November.
  6. Clark, Todd E, 1998. "Employment Fluctuations in U.S. Regions and Industries: The Roles of National, Region-Specific, and Industry-Specific Shocks," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 202-29, January.
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