Seminar Vol. 95

Topic: Artificial Administrative Boundaries: Evidence from China

Speaker: Associate Professor Pei Li, Xiamen University 

Time: May 11, 2018, 13:30–15:00

Venue: Conference Room 106B, Zhonghui Building (College of Economics, JNU)

Abstract:

What happens when subnational boundaries are badly drawn? We use China as a test case to investigate the ramifications. As Chinese provincial and longstanding socioeconomic boundaries are not fully aligned, counties of the same province may not share the same regional identity. Using Deng Xiaoping's economic liberalization campaign in 1991-92 to implement a difference-in-differences, we find that the annual growth differential between aligned and misaligned counties increased by 0.96 percentage points after Deng's campaign galvanized the provinces to pursue economic expansion. We also uncover evidence of discrimination against the misaligned counties by the provincial authorities.