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The Siphon Effect and Prisoner’s Dilemma in Regional Economical Development: A Case Study of the Six Central Provinces of China
WANG Jun-jie, XU Shu-yun, ZHOU Yi
Contemporary Finance & Economics
2024, 0 (8 ):
17-29.
Unbalanced development is one of the primary contradictions currently faced by China, manifesting not only in the imbalances between regions but also within specific areas, such as the differences among the six provinces in central China. As the political, economic, and cultural hubs within their provinces, provincial capitals are the key engines driving regional economic growth, and their development can significantly impact the progress of the entire area. The development divergence among the six central provinces can largely be attributed to the siphon effect and the prisoner’s dilemma phenomenon. The relatively developed provinces, especially those rapidly growing provincial capitals, will tend to siphon resources from those less developed provinces. This will lead to the flow of talents, capital, and materials from less developed regions to more developed ones, adversely affecting the development of the latter. Moreover, as some provinces implement“strong provincial capital”strategies centered on strengthening their capitals, local governments have begun to exhibit the clear characteristics of the prisoner’s dilemma between them. That is, when one province strives to expand the scale and influence of its capital, the neighboring provinces, in order not to lose their competitiveness, are also compelled to adopt the similar strategies to prevent the loss of their resources. The empirical analysis based on the panel data from 80 cities in the six central provinces also confirms the existence of the siphon effect. Particularly in Jiangxi Province, the decline in the primacy of its capital city over the past decade has significantly reduced its ability to attract the key resources such as population, talents, finance, and industry, compared to other provinces, which is a key factor in its relatively lagging economic development. Therefore, in order to narrow the economic gap with their neighboring provincial capitals, the provinces with lower capital city primacy need to enhance the construction of their capitals to gather more resources within their province and, if possible, attract resources from their neighboring provinces.
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