IDEAS home Printed from https://ideas.repec.org/p/uwa/wpaper/11-08.html
   My bibliography  Save this paper

Reducing Regional Disparities In China: Is Investment Allocation Policy Effective?

Author

Listed:
  • Anping Chen

    (School of Economics, Jinan University)

  • Nicolaas Groenewold

    (UWA Business School, The University of Western Australia)

Abstract

Inter-regional disparities in China have been an important concern for central-government policy-makers for most of the past 60 years. One of the main policy instruments for redressing the balance between the prosperous coastal region and the poorer inland region has been the allocation of investment spending. Yet there is little empirical work evaluating the response of disparities to changes in the regional distribution of investment. We help fill this gap and analyse the two-way relationship between these variables within a VAR/VECM framework, the results of which we tentatively interpret in terms of a simple demand model. We find, surprisingly, that changes in the regional allocation of investment have only a modest positive effect on inter-regional output disparities while the effect in the opposite direction is also positive but much larger. The effects of investment on output are larger, though, for the post-1978 period. We find our overall results to be robust to numerous variations in variable definition.

Suggested Citation

  • Anping Chen & Nicolaas Groenewold, 2011. "Reducing Regional Disparities In China: Is Investment Allocation Policy Effective?," Economics Discussion / Working Papers 11-08, The University of Western Australia, Department of Economics.
  • Handle: RePEc:uwa:wpaper:11-08
    as

    Download full text from publisher

    File URL: http://www.business.uwa.edu.au/__data/assets/rtf_file/0004/1627411/11--8-Reducing-Regional-Disparities-in-China-Is-Investment-Allocation-Policy-Effective-2.rtf
    Download Restriction: no

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwa:wpaper:11-08. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Verity Chia) or (Marina Grazioli). General contact details of provider: http://edirc.repec.org/data/deuwaau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.