How do fiscally created one-city monopolies cause intra-provincial inequality in China?

• Chen, Jian ^[1] ; Zhao, Di ^[2] ; He, Bin ^[1] ; Stanojevic, Savo ^[1]
  1. [1] Southeast University

     Southeast University

     China

     
  2. [2] Jinling Institute of Technology

     Jinling Institute of Technology

     China

     
• Localización: Land use policy: The International Journal Covering All Aspects of Land Use, ISSN 0264-8377, ISSN-e 1873-5754, Nº. 120, 2022
• Idioma: inglés
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• Resumen

  • Cities in a monopolistic position or possessing certain advantages within provinces induce the dilemma of aggregate economic growth and intra-provincial inequality in China, which remains controversial and unclear. Given the role of provincial capital administrative power in the formation of monocentricity, we propose and demonstrate how fiscally created one-city monopolies (FOCM) cause intra-provincial inequality. The empirical results, through measuring relative fiscal interventions between the provincial capital and the second-largest city in a province during the period 1990–2020, show that fiscally created one-city monopolies increase intra-provincial inequality. As part of a robustness check, we find an intensified impact of fiscally created one-city monopolies on the central and western regions. Endogeneity tests provide consistent evidence. We also point out that the adverse impact of fiscally created one-city monopolies on intra-provincial inequality primarily originates from local capital accumulation and industrial agglomeration. By contrast, industrial upgrading, urbanization, improvement of transportation, and opening-up help reduce this adverse impact.