Multi-dimensional boundary effects and regional economic integration: Evidence from the Yangtze River Economic Belt

Abstract

While the challenges posed by multi-dimensional boundary effects to global economic integration are studied widely, regional economic integration within a sovereign country requires additional analysis. The Yangtze River Economic Belt (YREB), a super-scale interprovincial area including three nested urban alliances, is a meaningful vision of regional economic integration in China. After building the producer services-based urban corporate network, this study investigates the influence of multi-dimensional boundary effects on regional economic integration by social network analysis and the exponential random graph model. The findings show that the fragmented reality of YREB’s economy is significantly different from the vision of the Chinese central government. More specifically, although the natural boundary restraints represented by distance have disappeared, multi-dimensional barriers to regional economic integration are still posed by administrative, policy, economic, and cultural boundaries. The estimation results pass the robustness test of the grouping sample of producer services. Therefore, we confirm that the multi-dimensional boundary effects, particularly the intangible ones, significantly impact regional economic integration even within a country with a top-down ‘strong’ governance.

Discontinuities in regional economic development due to administrative boundaries: Examining the mechanisms of the boundary effect

“…Previous studies have often simplified the boundary effect as a phenomenon leading to simple discontinuities across boundaries. However, in reality, it involves a more intricate mechanism with various phenomena interacting in complex ways (Capello et al, 2018b;He et al, 2022;Jacobs and Van Assche, 2014). Anselin (2010) categorizes spatial phenomena into two types: spatial dependency and heterogeneity, both potentially present around administrative boundaries.…”

“…In many studies to date, the boundary is merely used as a unit of analysis (see Barros and Feitosa, 2018) or is associated with the cumbersome boundary problem (see Leung, 1987). However, some studies (e.g., Basten et al, 2017; Capello et al, 2018b; He et al, 2022) argue that boundaries are spatial phenomena that can substantially influence local phenomena; that is, they cause boundary effect.…”

“…Among the various boundaries, Administrative boundaries are closely linked to local factors, such as fragmented regional power structures or regionalism (Savitch and Adhikari, 2017), making their discontinuous effects more prominent. These boundaries have significant implications for various aspects, including place-based policies (Shenoy, 2018), service provision (Leon-Moreta and Totaro, 2023), taxation (Basten et al, 2017), economic integration (He et al, 2022), as well as more intangible differences like local and regional data systems (Kitchin and Moore-Cherry, 2021) and local and regional reputation (Otero et al, 2022). Empirical evidence has demonstrated that these factors vary across administrative boundaries and can result in regional discontinuity (e.g., Capello et al, 2018a; He et al, 2022; Shenoy, 2018).…”

“…These boundaries have significant implications for various aspects, including place-based policies (Shenoy, 2018), service provision (Leon-Moreta and Totaro, 2023), taxation (Basten et al, 2017), economic integration (He et al, 2022), as well as more intangible differences like local and regional data systems (Kitchin and Moore-Cherry, 2021) and local and regional reputation (Otero et al, 2022). Empirical evidence has demonstrated that these factors vary across administrative boundaries and can result in regional discontinuity (e.g., Capello et al, 2018a; He et al, 2022; Shenoy, 2018). Such discontinuities near the boundaries’ periphery can impede interactions between areas, thus reinforcing regional path dependence (Martin and Sunley, 2006) and inhibiting regional development.…”

“…Previous studies have often simplified the boundary effect as a phenomenon leading to simple discontinuities across boundaries. However, in reality, it involves a more intricate mechanism with various phenomena interacting in complex ways (Capello et al, 2018b; He et al, 2022; Jacobs and Van Assche, 2014).…”