Does renaming promote economic development? New evidence from a city-renaming reform experiment in China

Jing Guo and Zhengyu Zhang

China Economic Review, 2019, vol. 57, issue C

Abstract: To explore the impact of city-renaming reform on economic growth, we compare the empirical performance of the synthetic control method, panel data approach and machine learning method (LASSO and elastic net) by the case of Xiangyang, which was officially renamed in 2010. We find that for the data on real GDP growth, the panel data approach reveals the best performance under the criteria of evaluating the quality of a model. The estimation results show that Xiangyang's real GDP growth rate rose by about 1.43% annually after the renaming reform. However, further discussions show that the annual growth rate of the tertiary industry decreased by 1.59%, which contradicts the mechanism of the brand effect of the reform. The statistical inference demonstrates that even if a city did not implement the city-renaming reform in 2010, the probability of obtaining an effect as large as Xiangyang's would be 25.9%. Therefore, the effect of the city-renaming reform is insignificant and other policy interventions—rather than the city-renaming reform—promote economic growth in Xiangyang. In summary, policymakers cannot win a “Promotion Tournament” by renaming cities.

Keywords: City-renaming reform; Synthetic control method; Panel data approach; Machine learning method; Treatment effects; Statistical inference (search for similar items in EconPapers)
JEL-codes: C23 C51 C53 R11 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:57:y:2019:i:c:s1043951x19301051

DOI: 10.1016/j.chieco.2019.101344

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