Economics

How does inter-provincial trade promote economic growth? Empirical evidence from Chinese provinces

J. Ji, Q. Shan, et al.

This paper reveals the surprising effectiveness of inter-provincial trade on boosting China's economic growth, showing every 1% increase translates into a 0.19% rise in per capita GDP. Conducted by Jianyue Ji, Qining Shan, and Xingmin Yin, the study highlights how trade fosters technology advancements and industrial upgrades, though impacts vary across regions.

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Abstract

This paper investigates the impact of inter-provincial trade on economic growth in China using panel data from 29 provinces (2000-2021) and a two-way fixed effects model. The study finds a significant positive effect, with each 1% increase in inter-provincial trade raising per capita GDP by 0.19%. This effect operates through technology improvement and industrial structure upgrading, but these mechanisms exhibit regional heterogeneity. Technology improvement is significant in central and western regions, while industrial structure upgrading is significant in eastern and central regions. The authors suggest region-specific policies to maximize the growth-promoting effects of inter-provincial trade.

Publisher

HUMANITIES AND SOCIAL SCIENCES COMMUNICATIONS

Published On

Aug 02, 2024

Authors

Jianyue Ji, Qining Shan, Xingmin Yin

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