An Empirical Analysis On The Relationship Between Regional Specialization And Economic Growth In China

Regional specialization is favorable for both regional and national economic growth. Therefore, for a long time scholars have been probing into how to measure and enhance the level of regional specialization. The thorough researches on regional specialization which started after reform and opening-up are mainly aroused by fierce competition of regional commodities which is due to the convergence of industrial structure, market partition and regional protectionism, etc. However, concerning the changing tendency of Chinese regional specialization the present studies are controversial. Some scholars hold the opinion that the level of regional specialization of China is declining, and regional market is moving towards non-integration. While others draw the opposite conclusion: the level of regional specialization of China is rising, and regional market is moving towards integration. Therefore, this paper measures different regions'specialization index from 1995 to 2004 based on the 2-digits data of the industry in twenty-nine provinces, autonomous regions and municipalities directly under the Central Government (Qinghai province and Tibetan Autonomous Region are excluded from the research due to lack of data). It also makes an empirical study on the relationship between the specialization index of different regions and economic growth in the hope of providing scientific basis for the relative departments in nation and its provinces, autonomous regions and municipalities directly under the Central Government when they formulates the industrial policy.This paper consists of four parts.Part One mainly elaborates the basis of selecting this topic as well as its significance. It first illustrates the role that regional specialization plays and then summarizes the major viewpoints of the studies on Chinese regional specialization and discusses the theoretical and practical basis of selecting this topic as well as its significance.Part Two measures the specialization of different regions in China, including survey method, source of the data, survey results and results analysis. It calculates the regional relative specialization index and the specialization index between regions of twenty-nine provinces, autonomous regions and municipalities directly under the Central Government. And it draws the conclusion that the specialization level of different regions in China are generally increasing.Part Three makes an empirical study on the relationship between the specialization of different regions and economic growth in China. Taking gross regional product as the variable which is being explained and the regional specialization index as the explanation variable, this part makes regression analysis using the panel data model. The results indicate that the level of regional specialization and economic growth in China are positively correlated.Part Four is the conclusion, which summarizes the former content and puts forward policies and suggestions. This paper draws three conclusions: (1) The specialization level of all the provinces, autonomous regions and municipalities directly under the Central Government in China is continually increasing; (2) The regional specialization level of the east part is the highest, followed by the middle part and the west part is the lowest. However, the regional specialization level of the west part increases faster. The disparity between the west part and the east part are reducing, while the disparity between the middle part and the east part is slightly expanding; (3) At the provincial level, regional specialization and economic growth in China are positively correlated and the level of regional specialization has significant effects on economic growth. Therefore, China should continue to enhance regional specialization division of labor and eliminate regional protectionism in order to achieve long-term and steady economic growth.