Development theory and practice (English)

[1M05] Regional decline and structural change in Northeast China: An exploratory space-time approach

*Yilin Chen¹ (1. Nagoya University, Graduate School of International Development)

Keywords:regional decline, structural change, ESTDA (exploratory space- time data analysis), resource dependence, Northeast China

The literature on New Economic Geography (NEG) highlights the importance of spatial concentration and spillover effects in economic growth or decline, which can cause various patterns or clustering of regional growth across different locations. Using the recent exploratory space-time data analysis on city-level income and its structural change components (sectoral output and employment ratio), this paper investigates the connections between regional decline and structural change in Northeast China over three development periods: Rust Belt (1995-2002), revival (2002-2015), and decline (2015-2019). We found space-time heterogeneity and spatial co-decline in regional income during the Rust Belt and the decline stages, respectively, with no significant spatial effects in the second period. Employment
in industry and construction appears to facilitate most of the space-time pattern of regional income. We also reflected the inter-provincial evolution of key industries within Northeast China, through spatially joint mobility of labour across cities in
different industries from 1995 to 2019. Specifically, agricultural labour has moved to the north, while the industry and construction labour force has moved to the middle and south, with no clear moving trend in the service sector. As dependence on natural resources has a "lock-in effect" that inhibits the transition from industry to services, industry and construction remain the most efficient in Northeast China. Therefore, the development of service sectors and the coordination of
spatial connections are essential for local governments.