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Regional Heterogeneity and China's Trade: Sufficient Lumpiness or Not?Meng LuUniversity of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP); University of Nottingham - School of Economics Chris MilnerUniversity of Nottingham - School of Economics Zhihong YuUniversity of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) May 2012 Review of International Economics, Vol. 20, Issue 2, pp. 415-429, 2012 Abstract: This paper explores whether there is sufficient lumpiness or heterogeneity in the relative endowments (capital, labor, and skills) of the regions of China to affect China's specialization and trade patterns. It does so using both the lens condition to identify the violation of factor price equalization across regions, and direct evidence on regional trade and specialization. The results are sensitive to the level of regional aggregation. The paper concludes, however, that China was sufficiently lumpy as recently as 2004 to affect its pattern of international trade.
Number of Pages in PDF File: 15 Accepted Paper SeriesDate posted: April 19, 2012Suggested CitationContact Information
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