Using the mass closure of development zones in 2004 as a natural experiment, we examine the causal effect of development zones on firm level TFP in China. The difference-in-difference estimator shows that on average, loss of development zone policies results in 6.5% loss of firms' TFP....

Many studies of regional disparity in China have focused on the preferential policies received by the coastal provinces. We decomposed the location dummies in provincial growth regressions to obtain estimates of the effects of geography and policy on provincial growth rates in 1996-99. Their...

We study optimal spatial policies in quantitative trade and geography frameworks with spillovers and sorting of heterogeneous workers. We characterize the spatial transfers that must hold in efficient allocations, as well as labor subsidies that would implement them. Assuming homogeneous workers...

Following the rationale for regional redistribution programs described in the official documents of the European Union, this paper studies a very simple multi-country model built around two regions: a core and a periphery. Technological spill-overs link firms' productivity in each of the two...

The Marshall Plan (1948-1952) was the largest aid transfer in history. This paper estimates its effects on Italy's postwar economic development. It exploits differences between Italian provinces in the value of reconstruction grants they received. Provinces that could modernize more their...

Italy and Germany have similar geographical differences in productivity - North more productive than South in Italy; West more productive than East in Germany - but have adopted different models of wage bargaining. Italy sets wages based on nationwide contracts that allow for limited local wage...

In Japan, the manufacturing has become geographically dispersed in the 1990s, when the import share has risen after the historic exchange rate appreciation. As is consistent with the interpretation that import penetration undermines regional input-output linkages, our regressions detect the...

This paper estimates the Rybczynski equation matrix for the twenty two-digit U.S." manufacturing industries for various years between 1880 and 1987. As predicted by the standard" general equilibrium theory of interregional trade, the regression estimates show that a consistent" set of factor...

Mortality was extremely high in the industrial cities of the 19th century, but little is known about the role played by pollution in generating this pattern, due largely to a lack of direct pollution measures. I overcome this problem by combining data on the local composition of industries in...

Should the national government undertake policies aimed at strengthening the economies of particular localities or regions? Agglomeration economies and human capital spillovers suggest that such policies could enhance welfare. However, the mere existence of agglomeration externalities does not...