Spatial spillovers of regional wages: Evidence from Chinese provinces

Qiong Huang and Satish Chand

China Economic Review, 2015, vol. 32, issue C, 97-109

Abstract: This study investigates the effects of spatial interactions on local wages based on a panel data from 31 Chinese provinces between 2001 and 2010. Using the Global Moran's I statistic, we provide empirical evidence for the presence of spatial dependencies in provincial wages. Then, we estimate the provincial wage equation using a spatial panel model that controls for spatial heterogeneity and spatial interdependence as well as other regional characteristics. The empirical results show that spatial wage spillover plays an important role in the determination of local wages. Furthermore, we find that human capital and economic growth are two underlying forces strengthening wage spillovers across provinces.

Keywords: Wages; Spatial panel model; Wage spillovers; China (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (15)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:32:y:2015:i:c:p:97-109

DOI: 10.1016/j.chieco.2014.12.001

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