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Chinese dialects, revolutionary war & economic performance

Junbing Zhu and Theocharis Grigoriadis ()

No 2020/7, Discussion Papers from Free University Berlin, School of Business & Economics

Abstract: In this paper, we explore the effects of dialectal diversity on economic performance by drawing evidence from Chinese prefecture-level cities. Our dataset is a panel of 5-year average data over the period from 2001 to 2015 including 274 cities. We compute five indices of Chinese dialectal diversity: 1. Dialectal fractionalization; 2. Adjusted dialectal fractionalization; 3. Dialectal polarization; 4. Adjusted dialectal polarization and 5. Periphery heterogeneity. We find that dialectal fractionalization and dialectal polarization as well as periphery heterogeneity have a positive effect on both income per capita and economic growth. Adjusted dialectal fractionalization exhibits a positive effect only on the change in economic growth over time. However, adjusted dialectal polarization does not show any robust effects. Furthermore, the experience of being governed by the Chinese Communist Party during the revolutionary war inhibits the negative effects of dialectal diversity in eastern China, while it has persistent negative effects in central and north-eastern regions of the country.

Keywords: dialectal diversity; local economic performance; communist governance (search for similar items in EconPapers)
JEL-codes: O10 O40 P51 Z19 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cna, nep-eff, nep-gro, nep-tra and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:fubsbe:20207

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