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Provincial Conditional Income Convergence in China, 1953-1997: A Panel Data Approach

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  • Melvyn Weeks
  • James Yudong Yao
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    Abstract

    This paper examines the tendency towards income convergence among China's main provinces during the two periods: the pre-reform period 1953-1977 and the reform period 1978-1997 using the framework of the Solow growth model. The panel data method accounts for not only province-specific initial technology level but also the heterogeneity of the technological progress rate between the fast-growing coastal and interior provinces. Estimation problems of weak instruments and endogeneity are addressed by the use of a system generalized method of moments (GMM) estimator. The main empirical finding is that there is a system-wide income divergence during the reform period because the coastal provinces do not share a common technology progress rate with the interior provinces.

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    File URL: http://www.tandfonline.com/doi/abs/10.1081/ETC-120017974
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Econometric Reviews.

    Volume (Year): 22 (2003)
    Issue (Month): 1 ()
    Pages: 59-77

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    Handle: RePEc:taf:emetrv:v:22:y:2003:i:1:p:59-77

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    Related research

    Keywords: Provincial convergence; China; Panel data; GMM estimators; JEL Classification: O40; O41; O53; C14; H4;

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    Cited by:
    1. Daoqin TONG & Sandy DALL’ERBA, 2008. "Spatial Disparities In The Chinese Ict Sector: A Regional Analysis," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 28, pages 111-129.
    2. Qichun He, 2011. "Does FDI Promote Human Capital Accumulation? The Role of Gradual Financial Liberalization," CEMA Working Papers 455, China Economics and Management Academy, Central University of Finance and Economics.
    3. He, Qichun, 2011. "Home-bias Politics, Financial Deregulation and Economic Growth: A Causal Relationship," MPRA Paper 34482, University Library of Munich, Germany.
    4. He, Qichun, 2011. "Dances with Chinese data: are the reform period Chinese provincial panel data reliable?," MPRA Paper 35418, University Library of Munich, Germany.
    5. Pei-Chien Lin & Chun-Hung Lin & I-Ling Ho, 2013. "Regional convergence or divergence in China? Evidence from unit root tests with breaks," The Annals of Regional Science, Springer, vol. 50(1), pages 223-243, February.
    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. Holger Breinlich & Gianmarco I.P. Ottaviano & Jonathan R.W. Temple, 2013. "Regional growth and regional decline," Economics Discussion Papers 729, University of Essex, Department of Economics.
    8. Hengyun Ma & Les Oxley, 2010. "The Emergence and Evolution of Regional Convergence Clusters in China’s Energy Markets," Working Papers in Economics 10/14, University of Canterbury, Department of Economics and Finance.
    9. Zhaofang Chu, 2012. "Logistics and economic growth: a panel data approach," The Annals of Regional Science, Springer, vol. 49(1), pages 87-102, August.
    10. M. J. Herrerias & Javier Ordoñez, 2011. "New Evidence on the Role of Regional Clusters and Convergence in China (1952-2008)," Working Papers 2011/07, Economics Department, Universitat Jaume I, Castellón (Spain).

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