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INTERNET DIFFUSION AND REGIONAL INTEGRATION IN CHINA

China’s low regional integration has drawn ever-increasing attention. However, the effects of the Internet as a representative of information and communication technology have largely been ignored. To fill this research gap, the current study seeks to clarify the relationship between Internet diffusion and regional integration in China. An approach measuring regional integration is constructed using the retail price index data of various commodities from 2001 to 2009. The results of the panel data regression suggest that the Internet plays a positive, significant role in regional integration in controlling the economy level, governmental control, and international openness. These findings are robust, maintaining consistency across three measures of Internet variables and several alternative model specifications.