Energy endowments, barriers to trade and industry location in Chinese provinces

Irina Hotz

No 12-02, IRENE Working Papers from IRENE Institute of Economic Research

Abstract: This study analyzes the determinants of manufacturing activity across Chinese provinces with emphasis on the important role of energy endowments on the location of industries. The data set consists of a panel of 28 Chinese provinces and 13 manufacturing industries for the years 1994, 1997 and 1999-2009. A model of production location is estimated, including comparative advantage and economic geography dynamics. The effects of trade impediments and changes in economic policies on the distribution of economic activity are also considered. Results validate energy as a driving force of industry location. They further show that provincial protectionism poses a problem to market mechanisms, but indicate an increase of concentration of economic activity through time.

Keywords: China; factor endowments; industry location; energy; externalities; protectionism (search for similar items in EconPapers)
JEL-codes: F18 P2 R14 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2012-09
New Economics Papers: this item is included in nep-ene, nep-geo, nep-int, nep-tra and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:irn:wpaper:12-02

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