【主讲】Shiyu Bo (Jinan University)
【主题】The Value of Centralization: Evidence from a Political Hierarchy Reform in China
【时间】2016年12月26日 (周一) 15：30-17：00
【地点】上海财经大学经济学院楼701室
【语言】英文
【摘要】How does centralization or decentralization at government affect regional development? This paper draws upon a natural experiment in China's political hierarchy from the 1980s to investigate the effects of centralization in a novel sub-provincial setting. Using a difference-in-differences approach, I show that centralization has positive causal effects on the overall industrial output and urban population of regions. To understand the mechanism, I propose a theoretical framework, where centralization will help to reduce resource misallocation within a region and improve aggregate productivity. Consistent with the mechanism of a more efficient allocation of resources, my analysis of industrial firm-level data reveals a reduction after centralization in the dispersion of marginal products. I quantify the loss in productivity under decentralization by hypothetically reallocating inputs to equalize marginal products to the extent observed in conditions of centralization. In addition to the positive overall effects on regions, the reform also has distributional effects for the different counties that constitute the region. After the reform, industrial production tends to concentrate in counties which are the capitals of their regions.
