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Development of Financial Intermediation and the Dynamics of Urban-Rural Disparity in China, 1978-1998

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  • Yiu Por Chen
  • Mingxing Liu
  • Qi Zhang

Abstract

Chen Y. P., Liu M. and Zhang Q. Development of financial intermediation and the dynamics of urban-rural disparity in China, 1978-1998, Regional Studies. This paper focuses on the impacts of financial intermediation development on the urban-rural income disparity (URID) in China. Using a twenty-year province-level panel data set from 1978 to 1998, it is found that the change of URID may be explained by fiscal policy during the early reform period (1978-1989) and financial intermediates during the later reform period (1990-1998). In addition, it is shown that the direction the Kuznets effect, an inverted 'U'-shaped relationship between per-capita gross domestic product and URID, is sensitive to changes in government development policies. This study adds to the spatial economic inequality literature by clarifying the effects of urban-biased financial intermediation policy on the underlying dynamics of convergent and divergent effects on urban-rural inequality. [image omitted] Chen Y. P., Liu M. et Zhang Q. Le developpement de l'intermediation financiere et la dynamique des ecarts des revenus urbano-ruraux en Chine entre 1978 et 1998, Regional Studies. Cet article porte sur l'impact du developpement de l'intermediation financiere sur l'URID (Urban-Rural Income Disparity - les ecarts des revenus urbano-ruraux) en Chine. A partir d'une enquete a echantillon constant aupres des provinces et conduite sur une periode de vingt annees, a savoir de 1978 jusqu'a 1998, il s'avere que le changement de l'URID pourrait s'expliquer par la politique fiscale menee pendant la premiere periode de reforme (entre 1978 et 1989) et par les intermediaires financiers pendant la derniere periode de reforme (entre 1990 et 1998). Qui plus est, on montre que le chemin de l'effet Kuznets, un rapport en forme de U renversee entre le PIB par tete et l'URID, est sensible aux modifications de la politique de developpement du gouvernement. Cette etude cherche a contribuer a la documentation au sujet des inegalites economiques geographiques en eclaircissant l'impact des politiques en faveur du developpement de l'intermediation financiere au niveau urbain sur la dynamique sous-jacente des effets de convergence et de divergence sur l'inegalite urbano-rurale. Intermediaires financiers Inegalite urbano-rurale Effet Kuznets Politique de developpement Chine Chen Y. P., Liu M. und Zhang Q. Entwicklung eines Finanzausgleichs und Dynamik der Disparitat der Einkommen in Stadt und Land in China, 1978-1998, Regional Studies. Im Mittelpunkt dieses Beitrags stehen die Auswirkungen der Entwicklung eines Finanzausgleichs auf die Disparitat der Einkommen in Stadt und Land in China. Anhand eines 20-jahrigen Datensatzes auf Provinzebene fur den Zeitraum von 1978 bis 1998 stellen wir fest, dass sich die Veranderungen in der Disparitat der Einkommen in Stadt und Land wahrend der fruhen Reformperiode (1978-1989) durch die Fiskalpolitik und wahrend der spateren Reformperiode (1990-1998) durch Finanzausgleiche erklaren lassen. Daruber hinaus weisen wir nach, dass die Richtung des Kuznets-Effekts - des Verhaltnisses zwischen dem Pro-Kopf-BIP und der Disparitat der Einkommen in Stadt und Land in Form eines umgekehrten U - auf Anderungen in der staatlichen Entwicklungspolitik reagiert. Als Beitrag zur Literatur uber raumliche wirtschaftliche Ungleichheit werden in dieser Studie die Auswirkungen einer einseitig urban gewichteten Finanzausgleichspolitik auf die zugrundeliegende Dynamik der konvergenten und divergenten Auswirkungen auf die Ungleichheit von Stadt und Land geklart. Finanzausgleich Ungleichheit von Stadt und Land Kuznets-Effekt Entwicklungspolitik China Chen Y. P., Liu M. y Zhang Q. Desarrollo de la intermediacion financiera y las dinamicas de la desigualdad urbana-rural en China, 1978-1998, Regional Studies. El tema central de este articulo son las repercusiones del desarrollo de intermediacion financiera en la desigualdad de ingresos urbanos-rurales en China. Usando un grupo de datos de panel a nivel de provincias durante un periodo de 20 anos, 1978-1998, observamos que el cambio en la desigualdad de ingresos urbanos-rurales podria explicarse por la politica fiscal durante el periodo inicial de reformas (1978-1989) y los intermedarios financieros durante el periodo posterior de reformas (1990-1998). Ademas, mostramos que la direccion del efecto Kuznets, una relacion en forma de U invertida entre el PIB per-capita y la desigualdad de ingresos urbanos-rurales, es sensible a cambios en las politicas gubernamentales de desarrollo. Como aportacion a la literatura sobre desigualdades economicas y espaciales, en este estudio describimos los efectos de la politica de intermediacion financiera con sesgo urbano en cuanto a las dinamicas subyacentes de los efectos convergentes y divergentes de las desigualdades urbana-rurales. Intermediacion financiera Desigualdad urbana-rural Efecto Kuznets Politica de desarrollo China

Suggested Citation

  • Yiu Por Chen & Mingxing Liu & Qi Zhang, 2010. "Development of Financial Intermediation and the Dynamics of Urban-Rural Disparity in China, 1978-1998," Regional Studies, Taylor & Francis Journals, vol. 44(9), pages 1171-1187.
    • Handle: RePEc:taf:regstd:v:44:y:2010:i:9:p:1171-1187
    DOI: 10.1080/00343400903365052
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    References listed on IDEAS

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    1. Clarke, George & Xu, Lixin Colin & Zou, Heng-fu, 2003. "Finance and income inequality : test of alternative theories," Policy Research Working Paper Series 2984, The World Bank.
    2. Yasheng Huang, 2005. "Symposium on 'Selling China: Foreign Direct Investment during the Reform Era' - Huang's Response," Management and Organization Review, International Association of Chinese Management Research, vol. 1(2), pages 329-333, July.
    3. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross & Maksimovic, Vojislav, 2000. "Financial structure and economic development - firm, industry, and country evidence," Policy Research Working Paper Series 2423, The World Bank.
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    2. Wang, Xiang & Shao, Shuai & Li, Ling, 2019. "Agricultural inputs, urbanization, and urban-rural income disparity: Evidence from China," China Economic Review, Elsevier, vol. 55(C), pages 67-84.
    3. Yong Liu & Cuihong Long, 2021. "Urban and Rural Income Gap: Does Urban Spatial Form Matter in China?," SAGE Open, , vol. 11(1), pages 21582440211, March.
    4. Li, Mengxu & Liu, Jianghua & Chen, Yang & Yang, Zhijiu, 2023. "Can sustainable development strategy reduce income inequality in resource-based regions? A natural resource dependence perspective," Resources Policy, Elsevier, vol. 81(C).
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    6. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    7. MA Xinxin & KOMATSU Sho, 2023. "Impact of E-commerce Development on Income Inequality: Evidence from rural China based on cross-county panel data," Discussion papers 23044, Research Institute of Economy, Trade and Industry (RIETI).

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