Regional Heterogeneity and China’s International Trade: Sufficient Lumpiness or Not?

Univ. of Nottingham Research Paper No. 2009/09

35 Pages Posted: 15 Aug 2009

See all articles by Chris Milner

Chris Milner

University of Nottingham - School of Economics

Zhihong Yu

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP)

Meng Lu

A.C. Nielsen

Date Written: April 1, 2009

Abstract

This paper explores whether there is sufficient lumpiness or heterogeneity in the relative endowments (capital, labour 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 it pattern of international trade.

Keywords: Trade, lumpiness, regions, China

JEL Classification: R12, F11, F14

Suggested Citation

Milner, Chris and Yu, Zhihong and Lu, Meng, Regional Heterogeneity and China’s International Trade: Sufficient Lumpiness or Not? (April 1, 2009). Univ. of Nottingham Research Paper No. 2009/09. Available at SSRN: https://ssrn.com/abstract=1448562 or http://dx.doi.org/10.2139/ssrn.1448562

Chris Milner (Contact Author)

University of Nottingham - School of Economics ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Zhihong Yu

University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP) ( email )

University Park
Nottingham, NG7 2RD
United Kingdom

Meng Lu

A.C. Nielsen ( email )

2/F, East Ocean Center (Phase II)
618 Yan An Road East
Shanghai, 200001
China

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