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This paper explores the impact of the political hierarchies of cities in China from different perspectives. First, we examine the economic disparities between prefectural cities and municipalities. Furthermore, this paper draws upon a quasi‐ experiment to analyze the impact of upgrading Chongqing to a municipality in 1997 using the synthetic control method. The city‐upgrading policy significantly increased Chongqing's gross domestic product (GDP) in the following 4 years. Finally, we find that the policy increased GDP in treated cities within 1200 km of Chongqing by about 10%–13% relative to the control cities. [ABSTRACT FROM AUTHOR]

Empirical research on the determinants of regional economic development typically neglects the influence of culture. This study fills that gap by attempting to establish a causal linkage between culture and economic development in the Chinese context. Our empirical analyses are based on a comprehensive economic statistics of China's provinces and prefectures during 1978 to 2008. We use Protestantism as a proxy for culture because Protestant ethic has been linked to the spirit of capitalism and commercial culture in Weber's famous work. To isolate the exogenous variation in culture measure, historical Protestant dissemination is employed as instruments. The estimation results suggest that Christian commercial culture has a significantly positive impact on economic performance - per capita GDP after other important influences (i.e., capital, population, human resources, institutional quality, trade, infrastructure, geography, etc.) are controlled for. We also find heterogeneous effects of culture on economic development in different regions of China. [ABSTRACT FROM AUTHOR]