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Convergence across Chinese provinces: An analysis using Markov transition matrix

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  • Sakamoto, Hiroshi
  • Islam, Nazrul

Abstract

This paper adopts the distribution approach to study convergence across Chinese provinces. In particular, it uses the Markov transition matrix methodology to capture the dynamics embodied in the data and to produce corresponding ergodic distributions. The results indicate that distribution of per capita income across Chinese provinces has become bi-modal over the period of 1952-2003. However, a closer examination shows that the dynamics contained in the pre- and post-reform periods are different, producing very different types of ergodic distribution. While the ergodic distribution based on the pre-reform dynamics proves to be positively skewed, the one based on the post-reform period's dynamics proves to be negatively skewed. On balance, whether per capita income level of the Chinese provinces will converge soon still remains an open question.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 19 (2008)
Issue (Month): 1 (March)
Pages: 66-79

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Handle: RePEc:eee:chieco:v:19:y:2008:i:1:p:66-79

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Web page: http://www.elsevier.com/locate/chieco

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References

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Citations

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Cited by:
  1. M. Herrerías, 2012. "Weighted convergence and regional growth in China: an alternative approach (1952–2008)," The Annals of Regional Science, Springer, vol. 49(3), pages 685-718, December.
  2. Herrerias, M.J. & Ordoñez, J., 2012. "New evidence on the role of regional clusters and convergence in China (1952–2008)," China Economic Review, Elsevier, vol. 23(4), pages 1120-1133.
  3. Funke, Michael & Yu, Hao, 2009. "Economic growth across Chinese provinces: in search of innovation-driven gains," BOFIT Discussion Papers 10/2009, Bank of Finland, Institute for Economies in Transition.
  4. Hiroshi Sakamoto, 2012. "Future Prediction of the Prefectural Economy in Japan: Using a Stochastic Model," ERSA conference papers ersa12p139, European Regional Science Association.
  5. Hiroshi Sakamoto, 2013. "Prediction Of The Prefectural Economy In Japan Using A Stochastic Model," Regional Science Inquiry, Hellenic Association of Regional Scientists, vol. 0(1), pages 13-24, June.
  6. 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.
  7. Nagayasu, Jun, 2009. "Regional Inflation in China," MPRA Paper 24722, University Library of Munich, Germany.

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