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Title: Whither China? Reform and economic integration among Chinese regions
Authors: Fidrmuc, J
Huang, S
Fidrmuc, J
Keywords: SVAR model;Business cycle synchronization;China;Economic reform
Issue Date: 2015
Publisher: Elsevier
Citation: China Economic Review, 33: pp. 94 - 110, (2015)
Abstract: This paper investigates the changing nature of economic integration in China. Speci cally, we consider business-cycle synchronization (correlation of demand and supply shocks) among Chinese provinces during the period 1955-2011. We nd that the symmetry of supply shocks has declined after the liberalization initiated in 1978. In contrast, the correlation of demand shocks has increased during the same period. We then seek to explain these correlations by relating them to factors that proxy for interprovincial trade and vulnerability of regions to idiosyncratic shocks. Interprovincial trade and similarity in factor endowments tend to make shocks more symmetric. Surprisingly, foreign trade and inward FDI have little e¤ect on the symmetry of shocks.
ISSN: 1873-7781
Appears in Collections:Dept of Economics and Finance Research Papers

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