We investigate the impact of roads and highways within the provinces on the regional trade of China using the augmented Gravity Model and theory of modeling trade. We take a panel data covering 31 provinces of China over 20 years period (1998-2017) for the estimations. We apply ARMA-OLS model, fixed and random effects, and robust findings by Hausman test. The results imply that road and highway lengths within the provinces have a significantly positive impact on the value of the province-wise exports. The positive impact is due to the fact the increased coverage of roads and highways increase accessibility to resources and mobility of goods and services within the regions. Moreover, employment in the transportation sector, per capita GDP and population of the provinces also illustrate positive and significant influence on regional exports and trade. The impact of China’s WTO accession on regional exports has been positive, while the financial crisis has had a negative impact. The year dummies show that, in the years following the financial crisis, China was able to regress from the external shock as trade within the provinces increased. The increase in exports after financial crisis is mainly due to the government policies and support to every province.

Abstract
1. Introduction
2. Literature Review
3. Methodology and Data
    3.1. Estimation Model
    3.2. Summary of Statistics
4. Results and Discussion
    4.1. Interpretation and Discussion on FinalEstimations
5. Conclusion and Policy Recommendations
References

• Muhammad YOUSAF(Research Scholar, School of Economics, University of International Business and Economics, Beijing, China.)
• Enitilina FETUU(Research Scholar, School of Economics, Capital University of Economics and Business, Beijing, China.)
• Buddhi Prasad SHARMA(Center for Trans-Himalaya Studies, Leshan Normal University, Sichuan, China.)
• Imran Ur RAHMAN(Center for Trans-Himalaya Studies, Leshan Normal University, Sichuan, China) Corresponding Author