Why Geographic Dispersion Before Its Time: Industrial Policy and Economic Geography in the People’s Republic of China

Yiyun Wu and Xiwei Zhu
Additional contact information
Yiyun Wu: Asian Development Bank Institute
Xiwei Zhu: Asian Development Bank Institute

No 633, ADBI Working Papers from Asian Development Bank Institute

Abstract: We investigate the trends and determinants of geographic concentration and industrial specialization in the People’s Republic of China (PRC) using interprovincial panel data for the period from 1999 to 2010. It shows that, after 2005, both geographic concentration and industrial specialization began to decrease, resulting in an increased similarity of provincial industrial structure. Industrial policies of provincial governments cause geographic dispersion and inverse specialization. The result is robust when using instrumental variables to deal with possible reverse causality and omitted variable problems. The mechanism behind this is that central government industrial policy, which tends to last for several years, is an important reference document for each provincial planner. This causes the less-developed regions to deviate from their comparative advantages, resulting in a combination of insufficient geographic concentration and inverse specialization in the PRC.

Keywords: geographic concentration; dispersal; industrial policy; specialization; local government; provincial government; economic geography (search for similar items in EconPapers)
JEL-codes: L59 L60 R12 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2017-01-18
New Economics Papers: this item is included in nep-cna, nep-geo, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.adb.org/sites/default/files/publication/222041/adbi-wp633.pdf Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbiwp:0633

Access Statistics for this paper

More papers in ADBI Working Papers from Asian Development Bank Institute Kasumigaseki Building 8F, 3-2-5, Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan. Contact information at EDIRC.
Bibliographic data for series maintained by ADB Institute ().