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FEC Articles Express: 2017 March Issue
May 2, 2017

Frontiers of Economics in China (FEC)

March 2017 (Free Full-Text Download)

Dani Rodrik
Premature Deindustrialisation in the Developing World

William Charles Sawyer, Kiril Tochkov, Wenting Yu
Regional and Sectoral Patterns and Determinants of Comparative Advantage in China

Ying Shen
The Effect of Family Size on Children's Education: Evidence from the Fertility Control Policy in China

Xiaolan Zhou
Welfare Analysis of Tacit Coordination in the U.S. Airline Industry

Qin Zhou, Kisalaya Basu, Yan Yuan
Does Health Insurance Coverage Influence Household Financial Portfolios? A Case Study in Urban China

Binlei Gong
Improving the Accuracy of Estimated Returns to Education in China —— Based on Employment Rate, Career Length, and Income Growth

Yi Che, Yan Zhang
Legal Knowledge, Land Expropriation and Agricultural Development in Rural China


Premature Deindustrialisation in the Developing World

Dani Rodrik
Ford Foundation Professor of International Political Economy, Harvard University;
CEPR Research Fellow



As developed economies have substituted away from manufacturing towards services, so too have developing countries—to an even greater extent. Such sectoral change may be premature for economies that never fully industrialised in the first place. This article presents evidence that countries with smaller manufacturing sectors substitute away from manufacturing to a larger extent, suggesting a trade channel through which falling international relative prices of manufacturing lead price-taking developing economies to substitute accordingly.


Regional and Sectoral Patterns and Determinants of Comparative Advantage in China

William Charles Sawyer, Kiril Tochkov
Department of Economics, Texas Christian University
Wenting Yu
Tepper School of Business, Carnegie Mellon University


China's export performance is marked by large regional disparities which affect trade patterns at the national level. This paper uses data from input-output tables to estimate the comparative advantage of Chinese provinces in the three main economic sectors over the period 1992-2007. In contrast to existing studies, we include the services sector in the analysis and construct not only indices of revealed comparative advantage for overall trade, but also bilateral indices for interprovincial trade. The results indicate that West and Central China have a comparative advantage in agriculture/mining, coastal provinces in manufacturing, and metropolitan provinces in services. However, interprovincial trade exhibits a more complex pattern. Regression analysis identifies labor endowments as the key determinant of comparative advantage in total trade, while physical capital is the driving force in domestic trade. Human capital and government spending have a positive effect, whereas industrial loans and taxes, along with provincial trade barriers, impair comparative advantage.

The Effect of Family Size on Children's Education:
Evidence from the Fertility Control Policy in China

Ying Shen
Department of Economics, University of Notre Dame


Empirical research on the effect of family size on child education is complicated by the endogeneity of family size. This study exploits plausibly exogenous changes in family size caused by China’s population control policy to estimate the causal relationship between family size and child education outcomes. The results show that, compared to an only child, a person with an additional sibling will have an approximate seventeen percentage points lower likelihood of completing middle school in China. Separate regressions across individual characteristics reveal that much of this negative effect appears to be driven by the cohorts born in earlier years after the policy, and children with the highest birth order within a family.

Frontiers of Economics in China (FEC) is a quarterly peer-reviewed journal edited by Institute for Advanced Research, Shanghai University of Finance and Economics, and published by Higher Education Press. Established in 2006 and with Guoqiang Tian as the Editor, the journal has a strong Editorial Advisory Board (with several Nobel Prize winners as board members), as well as a dedicated Co-Editors' team and an Editorial Board comprised of leading overseas and domestic Chinese economists.

The FEC welcomes submissions of theoretical and empirical papers from all fields of economics, particularly those with an emphasis on the Chinese economy and other emerging, developing or transition economies. Indexed in more than 10 international databases including EconLit, Google, RePEc and SCOPUS, the journal is listed into "2016 The Highest International Impact Academic Journals of China (Humanities and Social Sciences)". Full-text papers are free for download at:

Editor: Guoqiang Tian, Texas A&M University; Shanghai University of Finance and Economics
Executive Editor: Zhiqi Chen, Carleton University
Co-Editors: Chunrong Ai, University of Florida
Kevin X.D. Huang, Vanderbilt University
Neng Wang, Columbia University
James Wen, Trinity College, USA

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