Will Environmental Regulation Narrow the Gap in Regional Economic Growth?

Empirical studies have shown that China's Air Pollution Prevention and Control Law (APPCL2000), as an environmental regulation, has significantly alleviated the air pollution problem and improved the TFP of air polluting enterprises. However, few scholars have studied the regional heterogeneity of this policy. To study this issue, this manuscript introduces the "Hu Line" from the perspective of regional resource endowment differences and divides China into a resource advantage area (A area) and a resource disadvantage area (B area). Subsequently, this manuscript uses the triple difference model and big data of Chinese industrial enterprises to verify. The results show that under environmental regulations, the TFP of air polluting enterprises in B area has increased more than in A area, and the rapid decline in the proportion of low-efficiency air polluting enterprises in B area is the main mechanism. It shows that environmental regulation is beneficial to narrow the gap of regional economic growth and realize economic catch-up in resource-disadvantaged areas.

China's Investment Abroad and Imports to Countries Along the Belt and Road

Belt and Road is an open regional economic cooperation system. The strategy of Belt and Road is proposed to promote economic development and trade cooperation between China and the countries along the route, and to jointly build a community of shared interests and destiny between China and the countries along the rou2te. Under the current international background of global economic integration and trade protectionism, Researching on China’s investment abroad and imports to countries along the Belt and Road has strong practical significance. This article analyzes the status quo of China's investment and imports in countries along the Belt and Road, studies the existing problems, and proposes countermeasures.

Regional Economic Growth and R&D Costs

Innovations can help Russia to achieve economic growth. However, the R&D sector that produces these innovations totally depends on funding. The article introduces an analysis of the trends in R&D funding in Russia. Regional funds for financial support of research, technical, and innovative activities seem to be an effective tool that will eventually contribute to the economic growth. The research objective was to identify the relationship between R&D funding and economic growth. A review of scientific publications revealed some theoretical aspects behind the effect of R&D costs on other indicators of economic growth. A cluster analysis made it possible to identify some regions where the relationship between R&D expenditures and indicators of economic growth are most pronounced. The study can help regional authorities to plan local budgets and achieve economic growth for their regions.

Determinants of Regional Economic Resilience to Economic Crisis: Evidence from Chinese Economies

The severity of the 2007–2008 economic crisis and the spatial heterogeneity of its impact have accelerated the study of regional economic resilience. The economic crisis has affected most parts of the world, and its impact is highly heterogeneous within China. The aim of this study was to explore the determinants of regional economic resilience across 284 Chinese cities from 2003–2018. Both nation-based and province-based regional economic resilience were examined. A multilevel logistic regression model was established, finding a disparity of provincial effects on regional performance during the economic crisis. Regional economic resilience is significantly affected by provincial trajectories, economy size, and resources. There are five significant determinants of economic resilience: income inequality, innovation, government intervention, human capital, and financial development. The results provide evidence for the government to design region-based policies, taking into consideration the size and the resources of the region’s economy to build a resilient wall to defend against external shocks and to form a basis for sustainable development.

Multi-dimensional boundary effects and regional economic integration: Evidence from the Yangtze River Economic Belt

While the challenges posed by multi-dimensional boundary effects to global economic integration are studied widely, regional economic integration within a sovereign country requires additional analysis. The Yangtze River Economic Belt (YREB), a super-scale interprovincial area including three nested urban alliances, is a meaningful vision of regional economic integration in China. After building the producer services-based urban corporate network, this study investigates the influence of multi-dimensional boundary effects on regional economic integration by social network analysis and the exponential random graph model. The findings show that the fragmented reality of YREB’s economy is significantly different from the vision of the Chinese central government. More specifically, although the natural boundary restraints represented by distance have disappeared, multi-dimensional barriers to regional economic integration are still posed by administrative, policy, economic, and cultural boundaries. The estimation results pass the robustness test of the grouping sample of producer services. Therefore, we confirm that the multi-dimensional boundary effects, particularly the intangible ones, significantly impact regional economic integration even within a country with a top-down ‘strong’ governance.

Developing a competitiveness index at sub-national level for India: an economic growth measure

PurposeThe objective of this study is threefold–first, to develop a Regional Competitiveness Index (RCI) for measuring competitiveness of sub-national regions for India; second, to test this index for its ability to explain regional growth, which validates usage and applicability of this index; and third, to further investigate if the competitiveness of states is in turn caused by economic growth, i.e. it is tested if there is a bidirectional causality between competitiveness and regional growth.Design/methodology/approachThe data of indicators used in the index are from sources available freely in public domain. The competitiveness index is constructed using equal weightage supported by principal component analysis (PCA) technique. The causal relationship analysis is done using panel data of 10 years from 2008 to 2017 for 32 Indian states/union territories. The generalized method of moments (GMMs) is used for this dynamic regression estimation.FindingsBased on RCI score, states have been ranked and through rank analysis, the authors observe the performance status of these sub-national regions and are able to categorize them as improving, no change or deteriorating in regional competitiveness. Using the GMM estimation, the association between RCI and economic growth is found to be significant at 10% level. This shows that regional competitiveness as captured through the RCI score is able to explain regional economic growth and economic disparity among the sub-national units. Further, that RCI score is found to Granger-cause growth, while growth does not lead to better RCI scores. This establishes the usefulness of RCI as an important policy variable to compare states and provide direction for sectoral reforms.Research limitations/implicationsThe limitations of the study include (1) broad assumption that these sub-national regions belong to a uniform macro-economic and technology environment, and (2) data constraints as it is a longitudinal study. The study implies that the composite index could capture differences in regional competitiveness explaining regional economic disparity and that competitiveness causes higher economic growth and not vice versa.Practical implicationsThe RCI score can prove to be a useful indicator of economic performance of different states and can be used by national and state policymakers to compare and assess regional disparity among different states. The pillar-wise scores will be useful for in-depth study of weakness and strength of the sub-national territories.Originality/valueConstruction of an RCI for sub-national territories and analysis of panel data for longitudinal study of ten years is unique in the regional competitiveness literature.

Regional economic structure and heterogeneous effects of monetary policy: evidence from Indonesian provinces

We analyze how regional economic structures affect the impact of monetary policy on rates of inflation across 34 Indonesian provinces. The paper first applies structural factor augmented vector autoregressive model (SFAVAR) to all the 34 provinces based on monthly provincial data in order to measure the length and magnitude of responses of regional inflation to monetary policy shock, derived from the consequential impulse response functions of 34 provinces. In the second step, we analyze the impact of economic structures on the length and magnitude of regional inflationary responses of 34 provinces. We find that the impacts of monetary policy across regions are significantly influenced by economic structural variables such as manufacturing sector share to GDP, mining sector share to GDP, bank lending share to GDP and export share to GDP. In addition, we found the spatial lag, rate of inflation of neighboring provinces, is also statistically significant. In a similar fashion, economic structural variables such as manufacturing sector share to GDP, construction sector share to GDP and investment share to GDP are found statistically significant in explaining regional differences of monetary policy efficiency. Our findings imply economic structures of provinces have to be incorporated to designing monetary policy in Indonesia.