区域经济学regional-economic-development第九章

1、LESSON 9The paper by Gries and Redlin looks at international integration as a determinant or influence on regional development in China.In certain respects this paper parallels the Marti et al paper that looked at the impact of joining the WTO. International integration is, in many respects, analogo

2、us to WTO membership.China seems to be afflicted by growing regional disparities. The regional Gini coefficient increased from 0.35 in 1995 to 0.43 in 2004.Regional convergence can be regarded as an indicator of the continuity of the rapid growth process. A scenario of convergence indicates that Chi

3、nas average growth is not driven solely by a small number of rapidly developing regions and so it may be somewhat sustainable.It is not at all clear that convergence means that growth is not driven by a small group of provinces. It may mean that the dependence on this small group is reduced over tim

4、e as growth spreads across all regions but it does not change the dependence on this smaller group for the foreseeable future.Nor is it clear why growth that is limited to a few provinces is more or less sustainable than growth that is more widespread in regional terms.The available evidence and var

5、ious studies that have been carried out based on this evidence are ambiguous with respect to whether per capita income across provinces has been converging or diverging. Several studies claim the former while others find the latter. But on balance, there would appear to be strongest support for the

6、hypothesis that regional disparities have been increasing.There is definite evidence of a technology gap between the coastal and the interior provinces.There also seems to be support for the argument that regional income divergence is explained by an increase in the average income gap between the co

7、ast and the inland, rather than by an increase in the variance within either the coast or the inland regions. Physical capital stock persistently shows a significant impact on GDP growth in China.Human capital has been shown to contribute significantly to growth and welfare in China.Both physical ca

8、pital and human capital, therefore, are part of the explanation for differences in regional development.There is also a general view that economic integration is a strong factor in regional development in China.The importance of economic integration and openness for Chinas provinces is broadly ackno

9、wledged.Location may also be important in this. The advantageous location of the coastal provinces is noted in several studies in the context of lower transportation costs and a more successful open door policy.Another way of putting this argument is to say that geography that translates into lower

10、international transaction costs is responsible for a significant part of the successful growth of the coastal belt.There is also an argument that remote regions cannot catch-up with their eastern counterparts due to the long distance to economic centers that these remote regions face.What Gries and

11、Redlin do is build a model that examines the determinants of per capita income growth for 28 Chinese provinces over the period 19912004.The specifics of their model we will skip over except to note that what they do is a kind of combination of a standard type of so-called neo-classical growth model

12、and the new economic geography model and newer growth theories like endogenous growth models.What this means is that they use a fairly standard growth model but they allow for externality effects and increasing returns to scale. These externalities come mainly through technology spill-over effects a

13、nd the technology comes from outside the country through FDI.In terms of major conclusions, the first is that growth in poorer regions comes about through a process of technological imitation where the technology itself is brought by FDI.Second,trade is highly significant and shows a positive effect

14、 on growth. Learning to produce for the international market seems to be an important growth driving mechanism through international integration.Third, domestic physical capital is a major determinant of growth. Where this capital or more properly where the funds for the investment that the capital

15、represents come from matters. If savings within a province provide the source for investment in that province, then there is no inter-provincial growth conflict. But if it comes from another province, there is and divergence can be a result.Fourth, better education at the secondary level improves th

16、e process of industrialization. Qualified workers with intermediate skill level have the ability to work in production plants with high productivity. Hence increasing human capital per capita affects economic output in the sense that it leads to higher productivity.Fifth, good governance in a provin

17、ce is inextricably linked to its competitiveness and that the quality of institutions has a positive effect on economic growth. High collinearity of marketisation with FDI suggests that FDI are attracted by marketisation and a bundle of components consisting of good institutional conditions, FDI, an

18、d the expansion of the domestic private sector drives growth.Sixth, government administration expenditure and the expenditures in culture, education, science and public health shows, if anything, a significant negative impact on growth. The findings suggest that there is an over-investment in certai

19、n fields of government spending. Government expenditure needs to be adjusted and optimized to drive the growth process more efficiently. Seventh, when agglomeration is measured by urbanization, taking the ratio of employed urban workers to total population, the effect is insignificant. When marketis

20、ation is included, urbanization becomes highly significant, however, suggesting that agglomerations are an own ingredient for growth.What this all means is not clear. Most significantly, it is not clear that urbanization is the appropriate way to measure agglomeration effects.In summary, all three k

21、inds of capital, namely domestic physical capital, human capital and foreign capital, enter positively and significantly. To a large extent, these factors are responsible for the development of Chinas provinces and hence of China as a whole. With regard to the tremendous success story of the coastal

22、 belt during the sample period the hypothesis that international integration has had an enormous effect is supported by the positive effect of FDI and trade.They also find a group of variables that has no or even a negative effect on growththese include population, government expenditure and the pro

23、xies for agglomeration and urbanization.Overall they find that the poorer provinces are catching up. The question is, how quickly?The Gries and Redlin paper is, in many respects, the most complex of the three we have looked at. But the results are consistent with what the others have to say. The mos

24、t surprising result is the finding with regard to agglomeration.There is, however, a question of whether urbanization is the best way to proxy agglomeration. This can be a general problem in many economic estimation models. Whenever there is no direct way to measure something, a proxy must be used.

25、But that always raises the question as to whether the proxy is appropriate.The paper by Chen and Zheng argues that government policy has played a large part in regional inequalities in China. They note that the government gave preferential treatment to certain regions at the beginning of the reform process. This preferential treatment, in turn, created an environment in these provinc