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Regional Concentration of Industry in China: Decentralised Choices or a Central Plan?

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Abstract

The economic growth and development of China during the past 35 years has been associated with profound impacts on the well-being of the Chinese people, on patterns of global trade and prices of manufactured goods, and on industrial location within China itself. Many would view China's government and its policies as the dominant, perhaps exclusive, force in determining location and concentration of Chinese industry. This raises the question: can a theoretical approach based on decentralised optimization and location choice provide insights concerning the ongoing changes in industrial concentration in China? We address this question, putting forward a simple model and testing it using Chinese data.

Suggested Citation

  • Stephen Sheppard & Dan Zhao, 2016. "Regional Concentration of Industry in China: Decentralised Choices or a Central Plan?," Department of Economics Working Papers 2016-17, Department of Economics, Williams College.
    • Handle: RePEc:wil:wileco:2016-17
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    Keywords

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    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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