Based on the framework of new economic geography and new institutional economics, this paper takes China’s accession to the WTO as a quasi-natural experiment to empirically examine the impact of the historically inherited "Interlocking Spatium" principle of administrative division on regional economic development. Findings reveal that this principle hinders economic growth of "interlocking" regions in the context of globalization by elevating transaction costs, suppressing the efficiency of resource allocation, and dampening endogenous development potential. The research shows that the traditional administrative division principle based on political security may morph into a "liability of institutions" in the modern era. This provides a new perspective and evidence for understanding how foundational institutions affect the construction of a unified national market. Accordingly, the paper proposes measures such as optimizing cross-regional collaborative governance, advancing market integration reforms, and implementing differentiated regional policies to soften the constraints of administrative boundaries, thereby providing support for the development of a unified national market.
MA Li-li
,
LIU Yu-dong
,
MA Ming-pu
,
Colleagues
. The economic consequences of geographical fragmentation:Dual evidence from the interlocking spatium principle and China’s WTO accession[J]. Urban Problems, 2025
, 364(11)
: 37
-51
.
DOI: 10.13239/j.bjsshkxy.cswt.251106
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