2012 Volume 42 Issue 4 Pages 871-884
Regional development is different within a country. One region starts the developmental process with advantages such as location, amount of natural resources, pool of human capital and R&D. However, another region remains undeveloped with disadvantages in the initial conditions of economic development. Therefore, economic development of regions does not geographically equal.
Even though regional development is geographically uneven, economic transactions occur between regions. With the development of transportation, transactions of goods and services enlarge the geographical sphere. Regions with different levels of development mutually influence other regions through economic transactions. Mutual interactions among regions are generally called 'Spatial Interaction'.
In this study, I investigated the spatial interactions among provinces in China based on the recognition that the regional economy in China is not geographically uniform, The Interregional Input-Output Model of China developed by me was used for the analysis.
Through the input-output model analysis, I found the spillover effect is larger than the polarization effect, The economic benefit prevails from the core region to the peripheral region even though production is concentrated in provinces of the coastal region. In other words, the development of coastal or core provinces effects the promotion of development in the interior or peripheral provinces. Therefore, the development gap between regions will become small in the long run.
JEL Classification: O53, R12, R15
