Journal
JOURNAL OF INTERNATIONAL ECONOMICS
Volume 63, Issue 2, Pages 397-417Publisher
ELSEVIER
DOI: 10.1016/S0022-1996(03)00070-9
Keywords
local protectionism; regional specialization; scale economy; external economy
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This paper uses a dynamic panel estimation method to investigate the determinants of regional specialization in China's industries, paying particular attention to local protectionism. Less geographic concentration is found in industries where the past tax-plus-profit margins and the shares of state ownership are high, reflecting stronger local government protection of these industries. The evidence also supports the scale-economies theory of regional specialization. Finally, the overall time trend of regional specialization of China's industries is found to have reversed an early drop in the mid-1980s, and registered a significant increase in the later years. (C) 2003 Elsevier B.V. All rights reserved.
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