 Inter-regional barriers and economic growth: Evidence from ChinaYi Han and Mingqin Wu Journal of Development Economics, 2024, vol. 167, issue C Abstract: This paper examines the impact of a policy reform in China that removed inter-regional market barriers by incorporating counties into larger prefecture-level divisions. Employing a difference-in-differences approach, we compare the economic performance of incorporated counties before and after the reform to two control groups: counties that applied for incorporation but were unsuccessful, and counties that were incorporated at a later time. Our findings suggest that the reform had an immediate and sustained positive effect on the economic growth of incorporated counties. Using firm-level data, we provide evidence that the reform reduced policy-induced frictions, leading to increased regional specialization in industries with comparative advantage, more entries of new firms, and more exits of low-profit-margin firms. Overall, the research highlights the importance of reducing inter-regional market barriers in promoting economic growth in developing countries. Keywords: Market integration; Inter-regional barriers; Economic growth; China (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:167:y:2024:i:c:s0304387823001530 DOI: 10.1016/j.jdeveco.2023.103197 Access Statistics for this article Journal of Development Economics is currently edited by M. R. Rosenzweig More articles in Journal of Development Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.