Interregional protection: Implications of fiscal decentralization and trade liberalization

Li, Jie; Qiu, Larry D.; Sun, Qunyan

doi:10.1016/s1043-951x(03)00024-5

Cited by 47 publications

(19 citation statements)

References 3 publications

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“…The second concern has to do with fiscal revenues extraction. In a context of fiscal decentralization, local governments tend to protect in priority big taxpayers to maximize their intervention power (see Li et al, 2003) for a formal modeling of this argument).…”

Section: Determinants Of Domestic Border Effectsmentioning

confidence: 99%

A Fragmented China: Measure and Determinants of Chinese Domestic Market Disintegration

Poncet¹

2005

Rev International Economics

320

169

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This paper studies the degree of integration of China's domestic market and investigates the determinants of inter-provincial trade barriers under the rubric endogenous trade policy theory. I rely on industry-level trade flows extracted from provincial input-output tables to develop a model that analyzes the magnitude and evolution of Chinese provinces' engagement in domestic trade by computing all-inclusive indicators of trade barriers. Results underline that over the 1990s, not only was China's domestic market fragmentation along provincial borders great, but it also has become more severe at least between 1992 and 1997. The investigation of province-level and industry-level trade barriers confirms the relevance of applying the framework of endogenous protection to explain the level of impediments to trade between Chinese provinces. Findings emphasize that provinces' domestic trade protection pursues a dual objective of socio-economic stability preservation and fiscal revenues maximization. Copyright Blackwell Publishing Ltd 2005..

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Section: Determinants Of Domestic Border Effectsmentioning

confidence: 99%

A Fragmented China: Measure and Determinants of Chinese Domestic Market Disintegration

Poncet¹

2005

Rev International Economics

320

169

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“…The administration system has traditionally consisted of Provinces, autonomous regions and municipalities in China, and most of the criticism of market disaggregation has come from interregional borders (Li et al, 2003). Therefore, this study considers provinces, autonomous regions and municipalities as market units to investigate the interregional connection of energy markets in Mainland China.…”

Section: Data Sourcesmentioning

confidence: 99%

The emergence of convergent price clusters in China

Zhu

Oxley

et al. 2015

Econ Transit

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This paper reports new evidence on the existence of both large and small price divergent clusters for China's energy markets, 2000–2009. The largest convergent price clusters suggest that the coal and gasoline markets are well integrated, however, small convergent price clusters suggest that electricity and diesel markets are proving harder to integrate. The paper argues that the traditional approach to price convergence analysis should be applied with caution, especially in a transitional economy such as China where questions to be asked should relate to the ‘degree of market‐orientation’ and not simply whether it is a market‐based economy or not.

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“…Fujita & Hu (2001) argued that increases in exports had reinforced industrial agglomeration in coastal China. Li et al (2003) found that external trade liberalisation could help tear down existing inter-regional trade barriers within China. Thun (2004) argued that local obstacles to change were overcome only by increased international competition.…”

Section: Globalisationmentioning

confidence: 99%

Economic Transition and Industrial Restructuring in China: Structural Convergence or Divergence?

Zhu²

2007

Post-Communist Economies

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China has undergone substantial industrial restructuring since the economic transition. The triple process of marketisation, globalisation and decentralisation has had a significant influence on the changes in industrial structures in Chinese provinces. Using provincial–industrial level data for 1980–2003, this article finds that Chinese provinces are quite similar in their industrial structures. The interior provinces, however, have gradually specialised in resource-based industries, so their industrial structures deviate from the national structure, while the coastal provinces host fairly similar industries. Statistical analysis found that marketisation had enhanced the role of comparative advantage in natural resources, stimulating the divergence of industrial structures of provinces with different resource endowments while encouraging provinces with comparable endowments to develop similar industries. However, decentralisation generates economic fragmentation of domestic markets, fueling inter-provincial protectionism and rational imitation, and leading to the convergence of industrial structures among provinces. Globalisation has two effects. On the one hand, the globalised provinces have been converging in their industrial structures. On the other hand, the globalised provinces have rather different industrial structures from the underperforming provinces in exports and utilisation of FDI. This result implies that economic transition and its consequences are critical in understanding industrial restructuring in the transitional economies.

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Interregional protection: Implications of fiscal decentralization and trade liberalization

Cited by 47 publications

References 3 publications

A Fragmented China: Measure and Determinants of Chinese Domestic Market Disintegration

A Fragmented China: Measure and Determinants of Chinese Domestic Market Disintegration

The emergence of convergent price clusters in China

Economic Transition and Industrial Restructuring in China: Structural Convergence or Divergence?

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