IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-02134680.html
   My bibliography  Save this paper

Protectionism and industry localization in Chinese provinces

Author

Listed:
  • Cécile Batisse

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Sandra Poncet

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper investigates the determinants of regional specialization between 1992 and 1997 using a panel covering 33 industries across 25 Chinese regions, paying particular attention to the role of regional protectionism. This study is motivated by a double paradox concerning the Chinese economy over the reforms. First some authors evidence reduced regional specialization despite the promotion of liberalization away from the introverted development strategy of the pre-reform period. Moreover, several empirical works find a negative impact of the degree of regional concentration on the performance of industries. These counter-intuitive findings lead us to evaluate whether the localization of industries in Chinese regions is rooted in a market process or on the opposite results from industrial and trade policies disconnected from the logic of comparative advantages. This article investigates in a straightforward manner the role of inter-provincial barriers to trade in shaping regional specialization. China?s economic reforms since 1978 have introduced fiscal decentralization, which provided the local governments with a strong incentive to protect their tax base by shielding local firms and industries from outside competition. We study how the impediments to trade between Chinese provinces impact geographic concentration in production beside other traditional factors such as resource endowment, external economies and increasing returns to scale. Regional protectionism is apprehended through all-inclusive indicators of provincial industry-level trade barriers computed based on inter-provincial trade flows. Regional specialization is measured by a location quotient with respect to output. It is found that the dynamics of comparative advantages and the forces of the new geographic economy are at work in Chinese provinces. It is found that there is greater geographic concentration in industries that enjoy significant knowledge spillovers, specialized suppliers and labor-mar
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Cécile Batisse & Sandra Poncet, 2004. "Protectionism and industry localization in Chinese provinces," Post-Print hal-02134680, HAL.
    • Handle: RePEc:hal:journl:hal-02134680
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Herrmann-Pillath, Carsten & Libman, Alexander & Xiaofan, Yu, 2010. "State and market integration in China: A spatial econometrics approach to 'local protectionism'," Frankfurt School - Working Paper Series 137, Frankfurt School of Finance and Management.
    2. Blanc-Brude, Frédéric & Cookson, Graham & Piesse, Jenifer & Strange, Roger, 2014. "The FDI location decision: Distance and the effects of spatial dependence," International Business Review, Elsevier, vol. 23(4), pages 797-810.
    3. Moriki Ohara, 2014. "Stratified domestic demand: the “seedbed effect” on automobile firms observed from county-level sales data," Chapters, in: Mariko Watanabe (ed.), The Disintegration of Production, chapter 7, pages 179-212, Edward Elgar Publishing.
    4. Herrmann-Pillath, Carsten & Libman, Alexander & Yu, Xiaofan, 2014. "Economic integration in China: Politics and culture," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 470-492.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:hal-02134680. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.