Regional Heterogeneity and China's Trade: Sufficient Lumpiness or Not?
University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP); University of Nottingham - School of Economics
University of Nottingham - School of Economics
University of Nottingham - Leverhulme Centre for Research on Globalisation and Economic Policy (GEP)
Review of International Economics, Vol. 20, Issue 2, pp. 415-429, 2012
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
Date posted: April 19, 2012