Dynamic externalities and local growth - A panel data analysis applied to Chinese provinces

For 30 industry sectors, this paper provides empirical evidence on the relation between the local economic structure (local sectoral specialization, diversity, and competition) and the 1988-1994 value-added growth of Chinese provinces. The econometric analysis shows first that while diversity and competition have a,positive influence on local growth, speciliazation has a negative impact. Second, it appears that industry sectors located in coastal provinces and those located in interior provinces have been subject to different growth impulses. (C) 2002 Elsevier Science Inc. All rights reserved.