Regional inequality of firms' export opportunity in China: Geographical location and economic openness

Abstract

China has a large land area and uneven regional development. There are significant disparities between the three belts (eastern, central, and western China), with the eastern region being the most developed and the western region the least developed. Considering that export is regarded as one of the troikas for China's economic growth and firms are the basic entities engaged in trade activities, we examine whether there exists inequality of firms' export opportunity between the three regions. We find that the critical productivity level of firms' export in developed eastern China is significantly lower than that of western and central regions. Our results indicate that firms in eastern China are more likely to export and there is an obvious inequality of firms' exporting opportunities.