SPILLOVER EFFECT OF INFRASTRUCTURE AND REGIONAL GAP IN CHINA

Bihong Huang and Feng Ding

Applied Econometrics and International Development, 2009, vol. 9, issue 2

Abstract: Infrastructure provision in backward areas has been proposed by many studies as a cure for widening income gaps in developing countries like China. However, little has been said regarding infrastructure’s role as an unpaid production factor or the issue of optimal resource allocation. This paper examines the efficiency side of infrastructure provision in different Chinese provinces and its spillover effect on the non-infrastructure sector with an adapted dual-sector model. Our findings suggest that while the spillover effect on non-infrastructure sector is considerable across different Chinese regions, non-optimality of resource allocation still exists in regional attempts of developing public facilities.

Keywords: Dual-sector model; Infrastructure; Regional gap; Spillover effect (search for similar items in EconPapers)
JEL-codes: O11 O18 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (1)

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