Center for Forecasting Science, CAS Specialization and its changes in Chinese Provinces: Does the international integration still matter? (PRELIMINARY WORK) Xuemei JIANG Center for Forecasting Science, Chinese Academy of Sicences
Center for Forecasting Science, CAS Outline Background Motivation Method Results
Center for Forecasting Science, CAS Background
Center for Forecasting Science, CAS Background Volume Area Under Land Survey( hectares) Total Populations ( persons) Proportion of Urban Population Gross Regional Product(in billion RMB) Total Trade Volumes (USD 10 million) Foreign Direct Investment (100 million USD) Coastal Inland Sum Share Coastal11.4%39.9%45.3%59.3%91.7%84.2% Inland88.6%60.1%54.7%40.7%8.3%15.8% Main Indicators of Coastal and Inland Regions in China, 2007
Center for Forecasting Science, CAS Background GRP Shares of Coastal and Inland Regions,
Center for Forecasting Science, CAS Background Manufacture Shares of Coastal and Inland Regions,
Center for Forecasting Science, CAS Motivation of Paper Empirically analyze the dynamics of production activity locations What factor leads to the de-concentration since 2003?
Center for Forecasting Science, CAS Literature Review Concentration since 1990s Batisse and Poncet (2004), Economic Geography Ma (2006), The World Economy De Sousa and Poncet (2007), Regional Science and Urban Economics Amiti and Javorsik (2008), Journal of Development economics Hering and Poncet (2009, 2010) China Economic Review & The Review of Economics and Statistics Highlights the role of economic geography Factors: international integration
Center for Forecasting Science, CAS Literature Review Summary of the factors: International Integration Biased Opening-up Policy, FDI Flow & Exports Factor Endowments High- Skilled Labor & Capital Market Potential Increased return to scale Access to Suppliers Local Protectionism
Center for Forecasting Science, CAS Literature Review De-concentration since 2003 Descriptive Analysis: Wu and Li, 2010; Zhao, 2011 Congestion Cost Higher land and labor cost in coastal regions due to concentrations
Center for Forecasting Science, CAS Motivation of Paper Empirically analyze the dynamics of production activity locations What factor leads to the de-concentration since 2003? Does the international integration still matter? Database: Regional input-output tables, Sectoral level Access to suppliers Supplementary database: labor
Center for Forecasting Science, CAS Descriptive Analysis Location quotient: region k and industry i Regional Specialization: region k Industrial Concentration: industry i
Center for Forecasting Science, CAS Regional Specialization, Coastal Central West BJ AH CQ FJ HB GS GD HN GX JS HLJ GZ LN HB IM SD HN NX SH JL SsX TJ JX SC ZJ SX YN Mean Mean Mean
Center for Forecasting Science, CAS Industrial Concentration,
Center for Forecasting Science, CAS Industrial Concentration, (cont.) Electricity, gas and water production and supply Construction Transport and storage, post and telecommunication Wholesale and retail trade, catering trade Finance and insurance Real estate Social services Health services, sports and social welfare Education, culture and arts, radio, film and television Scientific research and general technical services Public administration and other sectors
Center for Forecasting Science, CAS Method: Empirical Model Dependent variable: share of output in industry i and region k Independent variable Market potential: Harris’s concept Market Potential i,k =
Center for Forecasting Science, CAS Method: Empirical Model Factor Endowments: Batisse and Poncent (2004) Labor intensity i,k = Capital intensity i,k = Natural resources intensity i,k =
Center for Forecasting Science, CAS Method: Empirical Model Supply Access: Zhao (2011) Supply access i,k = Wage: Hering and Poncet (2009, 2010) Wage cost i,k =
Center for Forecasting Science, CAS Method: Empirical Model International integration Dummy for coastal regions Lagged independent variable share of output in industry i and region k in previous period (2007 vs.2002)
Center for Forecasting Science, CAS Results with *, ** and *** denoting the significance at 1, 5 and 10% level. 02& inlandcoastal Fixed effects cap * *.017*** lab.185*.105* 0.252*.077* 0.420* resource ** supply access.004*-.090* 0.035*-.177* 0.031** market potential.246*.220* 0.299*.386* 0.106* wage cost.249*.199* 0.250*.211* 0.516** lag.524*.685* 0.394*.580* 0.440* Obs. No R2R
Center for Forecasting Science, CAS Temporal Change More important Supply access, Wage cost, Labor intensity, Market potential Less important Share in last period, Capital intensity Resource: Not significant
Center for Forecasting Science, CAS Coastal vs.Inland regions More important Supply access, Labor intensity, Wage cost Less important Capital intensity, Market potential, Share in last period Resource Only significant in coastal regions Role of international integration: Decreased!
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