Economic integration in China: Politics and culture

Carsten Herrmann-Pillath, Alexander Libman and Xiaofan Yu

Journal of Comparative Economics, 2014, vol. 42, issue 2, 470-492

Abstract: The aim of the paper is to explicitly disentangle the role of political and cultural boundaries as factors of fragmentation of economies within large countries. On the one hand, local protectionism plays a substantial role in many federations and decentralized states. On the other hand, if the country exhibits high level of cultural heterogeneity, it may also contribute to the economic fragmentation; however, this topic has received significantly less attention in the literature. This paper looks at the case of China and proxies the cultural heterogeneity by the heterogeneity of local dialects. It shows that the effect of politics clearly dominates that of culture: while provincial borders seem to have a strong influence disrupting economic ties, economic linkages across provinces, even if the regions fall into the same linguistic zone, are rather weak and, on the contrary, linguistic differences within provinces do not prevent economic integration. For some language zones we do, however, find a stronger effect on economic integration.

Keywords: Growth spillovers; Border effects; Culture and economic integration; China; Local protectionism (search for similar items in EconPapers)
JEL-codes: F1 H7 P2 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jcecon:v:42:y:2014:i:2:p:470-492

DOI: 10.1016/j.jce.2013.10.003

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