This paper evaluates infrastructure's impact on regional industrial productivity in China and distinguishes between within- and cross-region effects. Three infrastructure assets are examined: electricity, roads and railways. The analysis reveals positive short-run spatial interaction of electricity and road infrastructure, but not of railways. In the long term, the spatial spillovers of infrastructure stocks are positive among provinces not in competition for production, but turn negative among provinces similar in productivity in the case of electricity and among locations similar in exports in the case of roads and railways.

This article applies heterogeneous firm trade theory, developed for the manufacturing sector, to the hotel and tourism industry to detect expansion among star-rated hotels in the context of inbound tourism development at the macro level. This article adopts both a traditional ordinary least squares (OLS) panel model and a threshold panel model using data from 31 administrative regions (provinces) in China during the 2004–2013 period. The results reveal remarkable and significant nonlinear relationships between star-rated hotel expansion and inbound tourism development, thereby offering sound evidence supporting the research hypotheses. Star-rated hotel expansion in most provinces clusters in the standardized threshold between 0.48 and 0.83, while only a few hotels have realized ‘leapfrog development’ thus far. In addition, as in the particular case of star-rated hotels, inbound tourism development should be promoted through investments in human resources rather than through the exploitation of natural tourism resource endowments. The implications of our results are that rational development plans can be made according to different expansion levels of star-rated hotels in corresponding regions, when both hotel labour productivity and macro tourism environment are considered.