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How much does regional integration contribute to growth? An analysis of the impact of domestic market integration on regional economic performance in China (1997–2011)

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  • Tao Hong
  • Nannan Yu
  • Servaas Storm
  • Bo Gao

Abstract

This study analyses domestic market integration’s (DMI’s) dynamic influence on regional economic growth in China. The authors construct a matrix of annual DMI indices for 29 provinces for 1997–2015. They calculate the reciprocal matrix and combine it with the β-convergence model and spatial econometrics to analyse the relationships between DMI and regional economic growth. Their findings indicate that the relation between these two variables is not straightforward, and 2004 was a tipping-point year. Before 2004, the statistical relationship between DMI and regional economic growth was downward sloping, which suggests a trend of divergence and negative spillover effects across the 29 provinces. After 2004, the relationship between DMI and regional economic growth becomes positive: increased DMI now is strengthening (regional) economic growth. The authors provide the possible explanations for the unstable relationship combined with China’s reality as well.

Suggested Citation

  • Tao Hong & Nannan Yu & Servaas Storm & Bo Gao, 2019. "How much does regional integration contribute to growth? An analysis of the impact of domestic market integration on regional economic performance in China (1997–2011)," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 3189-3210, January.
  • Handle: RePEc:taf:reroxx:v:32:y:2019:i:1:p:3189-3210
    DOI: 10.1080/1331677X.2019.1592006
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    Cited by:

    1. Khamdan Rifa'i, 2023. "The Economic Impact of the US Unconventional Monetary Policy, Global Commodity Shocks, and Oil Price Shocks on ASEAN 3," International Journal of Energy Economics and Policy, Econjournals, vol. 13(5), pages 616-624, September.

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