The Dynamics of Economic Policy and Regional Specialization: Evidence from ChinaÂ¡Â¯s High-tech Industry
Abstract: This paper investigates the effects of economic policy on regional specialization of ChinaÂ¡Â¯s high-tech industries for the period 1996 to 2005. Results indicate that the average level of regional specialization increases over years. Moreover, high-tech industry sector is highly localized in coastal regions. Using a dynamic panel data approach, we find that the implementation of high technology oriented export policy and subsidies for science and high technology activities encourage regional specialization, whereas local governmentÂ¡Â¯s protections for local high-tech enterprises impede it. The empirical study also confirms the important role of high-skilled labor in determining regional specialization. Keywords: economic policy; specialization; high-tech industry; dynamics
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