Investment Climate in China: province estimates

Abstract

This paper uses a large firm-level survey to assess differences in performance across regions. A panel data analysis is conducted to explain both productivity and profitability across firms in terms of firm and industry characteristics. Regional dummies are included to pick up additional location-specific impacts and the size of these dummies is used to rank provinces. Province performance is then examined in terms of geography, infrastructure, the policy environment and aspects of the investment climate with the conclusion that the latter plays a major part in explaining provincial differences in performance.