‘Border’ effects of unobserved ‘borders’ in China’s internal trade

Ziruo Li, Jionghao Huang and Xiao-Hua Xia

Applied Economics, 2022, vol. 54, issue 30, 3439-3481

Abstract: Based on the input-output model, this article constructs a database of inter-provincial trade flows covering 26 industries and 28 provinces of China from 1992 to 2017. By heuristic search algorithm and iterative regression method, this article identifies the location of unobserved ‘borders’ in China’s internal trade. Existing in the Northeast, Northwest, and Southwest of China, the ‘borders’ reduce inter-regional trade by 36.11–39.10%, 47.85–52.43%, and 40.07–47.06% from 1992 to 2017, respectively. The results are robust against employing alternative methodology, industry-level trade flows as well as alternative measurement of transportation costs. Social networks, difference in industrial structure and their geographic structures might adjust slowly with the development of the economic and even affect the ‘border’ effects. The ‘border’ effects are neither administrative barriers nor statistical artefacts, but arise more from spatial heterogeneity related to fundamentals.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2021.1994519 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:54:y:2022:i:30:p:3439-3481

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2021.1994519

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().