Regional Protectionalism in China: Direct Micro Evidence

26 Pages Posted: 26 Feb 2004

See all articles by Binglin Gong

Binglin Gong

Fudan University - School of Management

Lixin Colin Xu

World Bank - Development Research Group (DECRG)

Kong-Yam Tan

World Bank - Beijing Office

Date Written: 2003

Abstract

Recently researchers have shown strong interests in regional protectionism in China. Due to data limitations, researchers usually have to reply on aggregate data on trade and prices at provincial levels, and often have to focus on particular industries. As a result, they have not been able to reach consensus as to the trends and damage of regional protectionism. Using a new data set specifically addressing the question of regional protectionism, we find that regional protectionism has significantly declined over time. It differs significantly across provinces and across industries, with tobacco and beverage (including alcohol) industries being harmed the most. There is also some evidence that the poor inland region has been hampered the most by regional protectionism. The gains from removing regional protectionism are economically significant (4-9% of total revenue of a typical firm). We also provide evidence that the share of export to other provinces by firms is positively related to a reduction in regional protectionism, higher relative prices in the other provinces, and the relative attractiveness of the business environment of the other provinces.

Keywords: Protectinalism, China, market

Suggested Citation

Gong, Binglin and Xu, Lixin Colin and Tan, Kong-Yam, Regional Protectionalism in China: Direct Micro Evidence (2003). Available at SSRN: https://ssrn.com/abstract=485126 or http://dx.doi.org/10.2139/ssrn.485126

Binglin Gong

Fudan University - School of Management ( email )

No. 670, Guoshun Road
No.670 Guoshun Road
Shanghai, 200433
China

HOME PAGE: http://www.fdsm.fudan.edu.cn/en/teacher/preview.aspx?uid=118716

Lixin Colin Xu (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H Street, N.W.
MC 3-427
Washington, DC 20433
United States
202-473-4664 (Phone)
202-522-1155 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/cxu

Kong-Yam Tan

World Bank - Beijing Office ( email )

Washington, DC 20433
United States

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