Economics at your fingertips  

Migration and Spatial Misallocation in China

Xiaolu Li (), Lin Ma and Yang Tang ()
Additional contact information
Xiaolu Li: Nanjing University of Posts and Telecommunications
Yang Tang: Nanyang Technological University

No 9-2021, Economics and Statistics Working Papers from Singapore Management University, School of Economics

Abstract: We structurally estimate the firm-level frictions across prefectures in China and quantify their aggregate and distributional implications. Based on a general equi-librium model with input and output distortions and migration, we show that the firm-level frictions are less dispersed and less correlated with productivity in richer prefectures. Counterfactual exercises show that reducing the within-prefecture mis-allocation increases the aggregate welfare, discourages migration towards large cities, and narrows the spatial inequality. Moreover, internal migration alleviates the impacts of micro-frictions on aggregate welfare and worsens their impacts on spatial inequality.

Keywords: misallocation; regional trade; economic geography; welfare gain (search for similar items in EconPapers)
JEL-codes: F12 O11 R12 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2021-09-01
New Economics Papers: this item is included in nep-cna, nep-geo, nep-int, nep-mig, nep-sea and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link) Full text (text/html)

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:

Access Statistics for this paper

More papers in Economics and Statistics Working Papers from Singapore Management University, School of Economics 90 Stamford Road, Sigapore 178903. Contact information at EDIRC.
Bibliographic data for series maintained by Cheong Pei Qi ( this e-mail address is bad, please contact ).

Page updated 2024-07-12
Handle: RePEc:ris:smuesw:2021_009