Still water runs deep: Soft power in chinese prefectures and municipalities

Abstract

This paper examines the role of soft power on regional economic outcomes in China over a twelve-year period of rapid income growth. We address the measurement issue of soft power by constructing a dictionary of soft-power-related terms and using textual analysis to process media news. Our findings reveal that soft power has a moderately positive causal effect on regional economic development. We also try to explore the precise channels from the perspectives of the economic composition, inner drive of growth, and growth’s sustainability. Our results are robust to endogeneity concerns, different model specifications, alternative measures of core variables, and additional concerns of external intervention. These results underscore the significance of soft power in regional economic growth and development, emphasizing the need to cultivate soft power resources alongside hard power.