Kennesaw State University

Internal Trade Barriers and Domestic Market Segmentation in China

Much work has been done to examine national borders as impediments to international trade, but less attention has been paid to inter state/provincial border effects. We plan to estimate the internal trade barriers in China, a country with substantial domestic market segmentation which has been largely concealed by its impressive export performance. By comparing China's internal trade barriers to its international trade barriers, we can explain why many Chinese-made products are sold in China at higher prices than in the U.S., and why China's growth relies heavily on exports rather than domestic demand (arguably a contributing factor to global trade imbalance).

Project Lead(s)

Xuepeng Liu
Associate Professor
Economics, Finance and Quantitative Analysis