A Study On The Influence Of Policy And Geographical Factors To Economic Development Of Ethnic Regions In China

In this paper,we have made an empirically study about the influence of policy factors and geographical factors to economic development in China’s minority areas by using RDD,based on Chinese 30 provinces’ economic development data in 1991,2000 and 2010.The results are as following: different autonomous counties of ethnic minorities in different regions,which implemented different national economic support policies,have different economic development situation.This difference can be derived from the different regional economic policies.From another point of view,it may also caused by the geographical factors that ethnic areas are mostly distributed in the poor remote mid-west areas.In order to verify the practical effect of national economic support policy,and confirm what practical effect does geographical factor have on national economic development,this paper will conclude the actual situation of Chinese national economic development since reform and opening up,and introduce the theoretical research on the two influencing factors in the international academia in recent years,then verify the authenticity of theoretical analysis by empirical analysis.The influence of geographical factors on regional economic development is controversial.On the one hand,geographical factors may directly affect economic growth.On the other hand,geographical factors may indirectly affect regional economic growth through economic policies and other factors.Through theoretical analysis,we know that,policy and geographical factors have an important impact on economic development in ethnic areas.And national economic support policies do play a role in national economic development,however,these policies didn’t work very well while negatively affected by geographical factors and other direct and indirect factors.It is policy implementation problem,but not policies themselves,which caused problems of national economic development.In fact,China’s national distribution and economic distribution almost coincide,thus the level of economic development in ethnic areas is affected by natural geographical factors.Within the ethnic minority areas of China,geographic factors will weaken the positive effects of national economic support policies on economic development in ethnic areas,and indirectly affect the level of income distribution in ethnic areas as an important element to economic development in minority areas.In the empirical part of this paper firstly using linear regression method,chose the dummy variables to represent policy and geographical factors as explanatory variables,examined the effect of two factors on the economic development of ethnic regions,and that geographic factors indirect influence on the economic development significantly.Secondly,this paper will use RDD model to check out the existence of discontinuity points for 2000 and 2010 data,which is based on the decision variables(minority population ratio in 1990,which is instrumental variable in RDD model)for policy implementation,then making a two stage least squares regression with data in 2000,whose dependent variable has significant breakpoints.Quasi experimental method is a kind of quasi random experiment,which can avoid the endogeneity problem of parameter estimation effectively.So it can accurately reflect the causal relationship between policy factors and explanatory variables through stripping the impact of geographical factors and other factors.Empirical test verifies the usefulness of national economic support policy to national economic development,and geographical factors have negative effects on national economic support policies.