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Cheng, Yiwen

Author: Essays on Development and Urbanization
Publication date: 2015
Subject terms: Economics ; China ; urbanization
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Abstract: This dissertation contains three chapters that examine development and urbanization in China since 1980. The first chapter investigates the impact of Special Economic Zones established since 1992 on local economic outcomes and urbanization rates. The second chapter studies local bureaucrats’ incentives while balancing the goals of economic growth and resource or environmental protection. The last chapter examines patterns of urbanization in China as related to the administrative hierarchy between urban and rural regions.In the first chapter, I examine the local and aggregate productivity impacts of Chinas Special Economic Zones (SEZ) program from the 1990s to 2006. Using an event study de- sign where I exploit variation in the timing of the first zone establishment across counties, I find that an SEZ increased GDP by 1% to 2% per year over 5 years. In order to assess the aggregate impact of the program, I develop a spatial equilibrium model with two sectors – agriculture and manufacturing. In the model, the economy-wide output impact of an SEZ depends on the elasticities of inter-regional and inter-sectoral labor supply, as well as the relative productivity levels of the SEZ-hosting regions and other regions. I do not find any evidence that the SEZ program induced inter-regional labor reallocation. However, the program did accelerate the shift of employment from the agricultural sector
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