Evaluating China's road to prosperity: A new economic geography approach

Mark Roberts, Uwe Deichmann, Bernard Fingleton () and Tuo Shi

Regional Science and Urban Economics, 2012, vol. 42, issue 4, 580-594

Abstract: Over the last two decades, China has embarked on an ambitious program of expressway network expansion. By facilitating market integration, this program aims to promote efficiency at the national level and contribute to the catch-up of lagging inland regions. This paper evaluates the short-run aggregate and spatial economic impacts of network expansion. We adopt a counterfactual approach based on the hybrid estimation–calibration of a structural ‘new economic geography’ model. Overall, we find that aggregate Chinese real income was approximately 6% higher than it would have been in 2007 had the expressway network not been built, although this does not take into account the opportunity costs associated with expenditure on the network. Although there is considerable heterogeneity in the results, we find no significant reduction in disparities across prefectures and no reduction in urban–rural disparities. If anything, the expressway network appears to have reinforced existing patterns of spatial inequality; although, over time, these will likely be reduced by enhanced migration.

Keywords: China; Transport infrastructure; Economic geography (search for similar items in EconPapers)
JEL-codes: C21 R11 R42 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (52)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:regeco:v:42:y:2012:i:4:p:580-594

DOI: 10.1016/j.regsciurbeco.2012.01.003

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