【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
World Development Vol. 66, pp. 588–597, 2015
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