Growth and Regional Inequality in China During the Reform Era

34 Pages Posted: 6 Jun 2003

See all articles by Derek C. Jones

Derek C. Jones

Hamilton College - Economics Department

Cheng Li

Hamilton College

Ann L. Owen

Hamilton College - Economics Department

Multiple version iconThere are 2 versions of this paper

Date Written: May 2003

Abstract

Chinese city-level data indicate that differences in growth rates are far more severe than indicated in previous studies which typically use data at higher levels of aggregation. We estimate growth equations using city-level data and find that the policy of awarding a special economic zone status enhances growth substantially, increasing annual growth rates by 5.5 percentage points. Annual growth rates of open coastal cities are, on average, 3 percentage points higher. Our qualitative results on the role of policy and the effects of FDI are similar to those of earlier studies that have employed provincial-level data; but, quantitatively, our results are substantially different. We also provide evidence of an indirect role of policy in the growth process through its ability to attract growth-enhancing foreign direct investment.

Keywords: Growth, Regional Inequality, China

JEL Classification: 010, 040, 053

Suggested Citation

Jones, Derek C. and Li, Cheng and Owen, Ann L., Growth and Regional Inequality in China During the Reform Era (May 2003). William Davidson Institute Working Paper No. 561. Available at SSRN: https://ssrn.com/abstract=405843 or http://dx.doi.org/10.2139/ssrn.405843

Derek C. Jones (Contact Author)

Hamilton College - Economics Department ( email )

198 College Hill Road
Clinton, NY 13323
United States
315-859-4381 (Phone)
315-859-4477 (Fax)

Cheng Li

Hamilton College ( email )

198 College Hill Road
Clinton, NY 13323
United States

Ann L. Owen

Hamilton College - Economics Department ( email )

198 College Hill Road
Clinton, NY 13323
United States
315-859-4419 (Phone)
303-859-4477 (Fax)

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