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Why is Chinese provincial output diverging?

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  • Westerlund, Joakim
  • Edgerton, David L.
  • Opper, Sonja

Abstract

In a recent paper Pedroni and Yao (2006) present strong evidence suggesting that Chinese provincial per-capita output is diverging, a result that goes against the Chinese government's goal of a balanced wealth-creation across provinces. This paper provides an in-depth analysis of the reasoning behind this finding. Our main result is that the divergence does exist, even when new data and more advanced methods of analysis are used. We also find that it has both an idiosyncratic and a common component. Hence, the increased per-capita output inequalities observed at the provincial level is due to both province-specific disparities and to disparities between groups of provinces.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 21 (2010)
Issue (Month): 4 (August)
Pages: 333-344

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Handle: RePEc:eee:asieco:v:21:y:2010:i:4:p:333-344

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Keywords: China Output convergence Panel unit root tests Common factor;

References

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Cited by:
  1. Cheong, Tsun Se & Wu, Yanrui, 2013. "Regional disparity, transitional dynamics and convergence in China," Journal of Asian Economics, Elsevier, vol. 29(C), pages 1-14.
  2. Johan Lyhagen & Johanna Rickne, 2014. "Income inequality between Chinese regions: newfound harmony or continued discord?," Empirical Economics, Springer, vol. 47(1), pages 93-110, August.

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