【Author】SHANZI KE

【work units】 Hunan University

【Source publication】World Development

【Summary】 This paper constructs an enhanced indicator for trade barrier and

examines the endogenous relationship between market integration and regional

economies across China from 1995 to 2011. Beyond the current literature, this

study shows: the endogenous relationship is significant, reflecting a virtuous cycle;

domestic openness contributes to the economies in the central region more than

in the other regions; the feedback effect is stronger in the eastern and central

regions than in the western and northeastern; domestic openness and regional

economies are adversely affected by state-owned enterprises and government

non-productive expenditure. Several policy implications relevant to Chinese

economy are drawn from the findings.

【Key words】 market integration, local protection, regional economies, price variation

, Asia, China

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