Economic Effects of Macao’s Integration with Mainland China: A Causal Inference Study

Cruz A. Echevarría (), Serhat Hasancebi () and Javier García-Enríquez ()
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Cruz A. Echevarría: University of the Basque Country UPV/EHU, Spain, Postal: Lehendakari Aguirre 83, 48015 Bilbao , Spain.
Serhat Hasancebi: University of the Basque Country UPV/EHU, Spain, Postal: Lehendakari Aguirre 83, 48015 Bilbao, Spain
Javier García-Enríquez: University of the Basque Country UPV/EHU, Spain, Postal: Lehendakari Aguirre 83, 48015 Bilbao, Spain
Authors registered in the RePEc Author Service: Javier García Enríquez

Journal of Economic Integration, 2022, vol. 37, issue 2, 179-215

Abstract: Macao was a Portuguese colony until 1999, when its sovereignty was transferred to China, initiating its integration process. This article attempts to estimate the consequences of this socio-economic process in terms of per capita gross domestic product (GDP). We build a panel data set spanning 1970 to 2012, with 25 countries, setting 2000 as the initial treatment year for the integration process. The analysis is carried out through two alternative methodologies: the synthetic control method and the panel data approach. The integration treatment had a significant, positive effect on Macao’s per capita GDP. As additional outcome variables, we also analyze the effects of integration on the per capita net inflow of foreign direct investment, the unemployment rate, and the per capita exports and imports of goods and services.

Keywords: comparative case studies; synthetic control method; panel data approach; causal inference; integration; Macao (search for similar items in EconPapers)
JEL-codes: C14 C15 C20 C34 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0848

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