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Do Border Effects Alter Regional Development: Evidence from China

Author

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  • Partridge, Mark D.
  • Yang, Benjian
  • Chen, Anping

Abstract

Market access/potential are main explanations for spatial variation in economic activity. Past research has recently used the quasi-natural experiment of the imposition and removal of Iron Curtain to assess how changes in market access influenced economic outcomes. Rather, we focus on key quantity effects of market access by tracking population changes induced by the creation of a subnational border. We exploit a quasi-natural experiment in China and use a difference-in-difference identification strategy to estimate the effects of introducing a new border when Sichuan province was split into Chongqing and Sichuan in 1997. We find that the new border has negative population effects on Sichuan counties located near the new border. These counties experienced a substantial decline in population growth after 1997 compared to Sichuan counties farther from the border, with the negative effects mainly confined to a band within 50-100 kilometers to the new border. Further investigation with falsification tests found that such border effects are unique to the new border region and are not related to the new Sichuan border region being more rural or to being on any provincial border.

Suggested Citation

  • Partridge, Mark D. & Yang, Benjian & Chen, Anping, 2017. "Do Border Effects Alter Regional Development: Evidence from China," MPRA Paper 82080, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:82080
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    File URL: https://mpra.ub.uni-muenchen.de/82080/1/MPRA_paper_82080.pdf
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    References listed on IDEAS

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    Cited by:

    1. Dmitriy Aleksandrovich Izotov, 2020. "Trade Interaction between Chinese Regions and Russia: The Border Effect," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 3, pages 24-51.
    2. D. A. Izotov, 2021. "Trade Barriers Between Chinese Regions and Russia," Regional Research of Russia, Springer, vol. 11(2), pages 230-243, April.

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    More about this item

    Keywords

    border effects; population changes; difference in difference; market access; agglomeration; China;
    All these keywords.

    JEL classification:

    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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