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Spatial spillover and regional economic growth in China

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  • Bai, Chong-En
  • Ma, Hong
  • Pan, Wenqing

Abstract

This paper investigates the spatial structure of the provincial economic growth and the spatial spillover in China from 1998 to 2008. First, we apply Moran's index to detect the positive spatial autocorrelations across the provinces of China. Second, we build a new economic geography model and the role of market potential in promoting regional income growth is highlighted. Third, two measures of market potential are constructed and a spatial error model is adopted to obtain the estimations, considering spatial autocorrelation. Controlling for major inputs, such as labor, capital, and human capital, the market potential continues to promote substantial regional growth. On average, an increase of 10 percentage points in the market potential increases the regional GDP per capita growth by 3–5 percentage points.

Suggested Citation

  • Bai, Chong-En & Ma, Hong & Pan, Wenqing, 2012. "Spatial spillover and regional economic growth in China," China Economic Review, Elsevier, vol. 23(4), pages 982-990.
    • Handle: RePEc:eee:chieco:v:23:y:2012:i:4:p:982-990
    DOI: 10.1016/j.chieco.2012.04.016
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    More about this item

    Keywords

    Spatial spillover; Regional economic growth; Market potential;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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