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Economic Spillover Effects in the Bohai Rim Region of China: Is the Economic Growth of Coastal Counties Beneficial for the Whole Area?

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Economic Spillover Effects in the Bohai Rim Region of China: Is the Economic Growth of Coastal Counties Beneficial for the Whole Area? China Economic Review 33 (2015) 123–136 Contents lists available at ScienceDirect China Economic Review Economic spillover effects in the Bohai Rim Region of China: Is the economic growth of coastal counties beneficial for the whole area? Caizhi SUN ⁎, Yudi YANG, Liangshi ZHAO Center for Studies of Marine Economy and Sustainable Development, Liaoning Normal University, 850 Huanghe Road, Dalian 116029, China article info abstract Article history: This study uses panel data on the Bohai Rim Region of China to test for spatial autocorrelation, and Received 27 July 2014 measures economic spatial spillover effects with the space Durbin econometric model. We discuss Received in revised form 14 January 2015 whether the economic development of coastal counties benefits the whole area. To do this, we Accepted 15 January 2015 focus on the “distance from the coast” factor, which is influenced by transportation time. The Available online 20 January 2015 results indicate the presence of significant spatial autocorrelation in the Bohai Rim Region. Further, economic spatial spillover effects exist in this region. “Distance from the coast” exerts a JEL classification: significantly negative impact on the local GDP per capita but a significantly positive impact on R11 the GDP per capita of other districts. This means that the economic development of coastal Keywords: counties does not benefit the whole region. “Value of exports” exerts a significantly positive Bohai Rim Region influence on the local economy and no significant influence on other counties, while “foreign Economic spillover effects direct investment” exerts a significantly positive influence on the local economy and a significant- Coastal county economy ly negative influence on other counties. “Number of employees in units” exerts a significantly Space Durbin econometric model positive influence on the local economy and a significantly negative influence on the other Spatial autocorrelation counties. The factors “primary industry's share in GDP” and “tertiary industry's share in GDP” influence the local economy positively, but the former exerts no significant influence on other counties and the latter exerts a negative influence on other counties. “Rate of fixed asset invest- ment” influences the local economy negatively and has no significant effect on other counties. “Total retail sales of social consumer goods” has no significant influence on the local economy but a positive significant influence on the others. Finally, marine resource utilization and marine output can affect economic growth positively. On this basis, we propose policy suggestions for harmonious economic development in this region. © 2015 Elsevier Inc. All rights reserved. 1. Introduction Since the start of China's open-door policy, the coastal areas of China have made remarkable achievements in economic and social development, relying on their great location advantages and abundant marine resources. However, with an enlargement of the economic gap between coastal and non-coastal areas, some scholars consider that the Chinese government may have been mistaken in its earlier belief that the eastern coastal areas would take the lead in development and trigger improvements in non-coastal areas (Bo, 2008; Peng, 2008). In recent years, the Chinese government has created a strategy for land–sea coordination, to strengthen the ⁎ Corresponding author. Tel.: +86 411 84258412; fax: +86 411 84258390. E-mail address: [email protected] (C. Sun). http://dx.doi.org/10.1016/j.chieco.2015.01.008 1043-951X/© 2015 Elsevier Inc. All rights reserved. 124 C. Sun et al. / China Economic Review 33 (2015) 123–136 effective interaction between ocean and inland. Is the economic growth of coastal regions beneficial, then, for the whole area? Does the ocean significantly influence the development of coastal regions? How can complementarity between the economies of coastal and non-coastal regions be achieved, so that one may benefit from the economic development of the other? This study will try to solve the aforementioned problems by measuring the spatial spillover effects of coastal economic development. An economic spatial spillover effect is defined as the influence of the economic development of a region on regions near it. Starting in the 1950s, development economists have paid close attention to the theoretical study of the relationship between unbalanced develop- ment and economic growth, using growth pole theory, cumulative and circular causality theory, and regional economic growth propa- gation theory (Hirschman, 1958; Myrdal, 1957; Perroux, 1950). Since the 1980s, the new economic geography systematically explored the spillover mechanisms associated with economic growth by analyzing the externalities of spatial agglomeration (Baldwin, Martin, & Ottaviano, 2001; Krugman, 1991). Recently, empirical studies about economic spillover effects made progress in measuring spillover effects among nations and districts (Carlino & Defina, 1995; Conley & Ligon, 2002; Douver & Peeters, 1998; Ramajo, Marquez, Hewings, & Salinas, 2008; Sonis, Hewings, & Guilhoto, 1995). The above studies serve as significant references for the theories and methods we use in this study. Over the past few years, some scholars have devoted themselves to researching interregional and interprovincial economic spillover effects in China. Some of these studies divided China into three areas—east, central, and west. According to Li and Chen (2004), the economic growth of the eastern area produced a spillover effect on the development of the central and the western areas; however, this was disputed by Bo and An (2010). According to Brun, Combes, and Renard (2002), the beneficial effect exerted on non-coastal provinces by the growth of the coastal provinces was not enough to reduce the economic disparity between the two. Meanwhile, other studies divided China into more subareas. For instance, Groenewold's (2008)study, which divided China into six areas, concluded that the growth of the southeastern coastal provinces had no obvious spillover effects on other provinces. Chen (2007) study, which divided China into eight areas, pointed out that while the northern and eastern coastal areas had obvious spillover effects on other areas, the southern coastal area did not. Pan and Li (2007) and Peng (2008) concluded that the economic development of coastal areas had no obvious impetus on the growth of non-coastal areas, using an eight-region input–output table. In conclusion, these studies used different methods of dividing the study area and different ways of measuring spillover effects, and yielded mixed results. All of them have contributed greatly to the measurement of coastal economic spillover effects in China. Nonetheless, the goals of the above studies differ from those of this study, as we discuss below. First, earlier studies on economic spillover effects always involved all of China and focused on economic spillover between regions or provinces. However, few studies have concerned economic spillover between counties, particularly from coastal regions. According to this study's goals with respect to the ocean, it's appropriate to choose the Bohai Rim Region as our study area, for the following reasons. 1) As the largest marine economic zone in China, the Bohai Rim Region accounted for 35.8% of Chinese gross ocean product in 2012. Our choice is conducive to discussions on the economic spillover between counties in a coastal region and the link between ocean and regional economies. 2) Considering all coastal areas together may easily mask the developmental peculiarities of specific areas. This region has very serious problems in regional develop- ment, including industrial isomorphism, redundant construction, vicious competition, and uncoordinated development (Zhou and Shu, 2008). What we do in this study is a meaningful attempt to solve them. Consequently, we chose the Bohai Rim Region (rather than all of China) as our study area and try to offer some suggestions for the regional coordinated development by exploring the interactive mechanism among the various economic factors. Second, earlier studies have always looked at the regional or the provincial level. It is possible that the influence of factors affecting coastal economic development, such as marine resources and environments, may be felt inland. However, given that ocean-related statistical data from the State Oceanic Administration and the National Bureau of Statistics in China almost does not involve the non-coastal cites (SOAC, 2013), we believe that such marine influences do not extend to the whole province or to the whole region. Therefore, setting our study at the county level and having a scope of coastal cities gives us a larger sample and a more reasonable and precise explanation of the truth. Third, if one goal of this study is to explore the ocean's impact on regional development, then it is unsuitable to divide the research area into coastal versus non-coastal counties by virtue of administrative boundaries, as past studies did. Be- cause all the counties in this area can be influenced by the ocean, this study tries to address the defect by introducing the factor “distance from the coast,” which is influenced by transportation time. In this way, we can clearly test the impact of the ocean and discuss precisely whether the whole area benefits from the economic development of counties close to the ocean. In order to achieve the above goals, this study uses the spatial Durbin econometric model to measure economic spillover effects. This
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