On The Influence Of Interprovincial Trade Barriers With Regional Productivity Growth

As the primary mean of local protectionism, interprovincial trade barriers cause China domestic market segmentation, which affects the regional productivity growth. First, based on "iceberg cost" theory model, this paper built price variance index as the evaluation of interprovincial trade barriers in China, then analyzed the trend of interprovincial trade barriers. Second, this paper builds a three-stage mold of three-player dynamic game, including local superior enterprise, the local competitive and the external provincial rival, to analyze the influence of the interprovincial trade barriers on the regional productivity growth. On this base, we more combined the panel data across 28 provinces in China from 1985 to 2004 to study empirically about our theoretical conclusion.We find out that the ascending of barriers go with gap enlarging among regions. There exists a critical point to the barriers. Only if the barriers exceeded this critical point, which leads to regional monopoly, the barriers would encumber regional productivity growth. See to the TFP decomposition, interprovincial trade barriers reduce technology efficiency but improve technology level. The influence depends on the rate of technology efficiency reducing and technology level improving.