Are there spillover effects between coastal and noncoastal regions in China?

A major policy debate in China starting in the Mao era and carrying through the Deng area involves the tradeoff between equity and efficiency in regional growth policies. In this paper, we explore whether there are regional growth spillover effects promised by Deng's policy of favoring initial industrial development in coastal provinces. A stated objective of these policies was the spread of coastal provinces' growth inland. We review the theoretical underpinnings of such effects and test for them with panel data for the period 1981-1998. We also test whether any spread effects are equally distributed over inland provinces. We find that spillover effects have not been sufficient to reduce disparities across Chinese provinces in the short run. (C) 2002 Elsevier Science Inc. All rights reserved.