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Xuemei JIANG Center for Forecasting Science, Chinese Academy of Sicences

Specialization and its changes in Chinese Provinces: Does the international integration still matter? (PRELIMINARY WORK). Xuemei JIANG Center for Forecasting Science, Chinese Academy of Sicences. Outline. Background Motivation Method Results. Background. Background.

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Xuemei JIANG Center for Forecasting Science, Chinese Academy of Sicences

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  1. Specialization and its changes in Chinese Provinces: Does the international integration still matter?(PRELIMINARY WORK) Xuemei JIANG Center for Forecasting Science, Chinese Academy of Sicences

  2. Outline • Background • Motivation • Method • Results

  3. Background

  4. Background Main Indicators of Coastal and Inland Regions in China, 2007

  5. Background • GRP Shares of Coastal and Inland Regions, 1980-2011

  6. Background • Manufacture Shares of Coastal and Inland Regions, 1980-2011

  7. Motivation of Paper • Empirically analyze the dynamics of production activity locations • What factor leads to the de-concentration since 2003?

  8. Literature Review • Concentration since 1990s • Batisse and Poncet (2004), Economic Geography • Ma (2006), The World Economy • De Sousa and Poncet (2007), Regional Science and Urban Economics • Amiti and Javorsik (2008), Journal of Development economics • Hering and Poncet (2009, 2010) China Economic Review & The Review of Economics and Statistics • Highlights the role of economic geography • Factors: international integration

  9. Literature Review • Summary of the factors: • International Integration • Biased Opening-up Policy, FDI Flow & Exports • Factor Endowments • High- Skilled Labor & Capital • Market Potential • Increased return to scale • Access to Suppliers • Local Protectionism

  10. Literature Review • De-concentration since 2003 • Descriptive Analysis: Wu and Li, 2010; Zhao, 2011 • Congestion Cost • Higher land and labor cost in coastal regions due to concentrations

  11. Motivation of Paper • Empirically analyze the dynamics of production activity locations • What factor leads to the de-concentration since 2003? • Does the international integration still matter? • Database: • Regional input-output tables, 1997-2007 • Sectoral level • Access to suppliers • Supplementary database: labor

  12. Descriptive Analysis • Location quotient: region k and industry i • Regional Specialization: region k • Industrial Concentration: industry i

  13. Regional Specialization, 1997-2007

  14. Industrial Concentration, 1997-2007

  15. Industrial Concentration, 1997-2007 (cont.)

  16. Method: Empirical Model • Dependent variable: • share of output in industry i and region k • Independent variable • Market potential: Harris’s concept Market Potential i,k =

  17. Method: Empirical Model • Factor Endowments: Batisse and Poncent (2004) • Labor intensityi,k = • Capital intensityi,k = • Natural resources intensityi,k =

  18. Method: Empirical Model • Supply Access: Zhao (2011) • Supply accessi,k = • Wage: Hering and Poncet (2009, 2010) • Wage costi,k =

  19. Method: Empirical Model • International integration • Dummy for coastal regions • Lagged independent variable • share of output in industry i and region k in previous period (2007 vs.2002)

  20. Results with *, ** and *** denoting the significance at 1, 5 and 10% level.

  21. Temporal Change • More important • Supply access, Wage cost, Labor intensity, Market potential • Less important • Share in last period, Capital intensity • Resource: Not significant

  22. Coastal vs.Inland regions • More important • Supply access, Labor intensity, Wage cost • Less important • Capital intensity, Market potential, Share in last period • Resource • Only significant in coastal regions Role of international integration:Decreased!

  23. Comments & Questions Email: jiangxuem@gmail.com

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