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

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Author Info
Yudon, Y.
Weeks, M.

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Abstract

China's accelerated growth rate during the reform period 1978-97 has reinforced concerns about how to cope with continued expansion while also maintaining balanced regional growth. We examine the tendency to, and the speed of, provincial income convergence during the two periods: pre-reform (1953-1977) and reform (1978-1997). The Solow growth model provides the main theoretical framework. The empirical method accounts for heteogeneity in both initial technology and the rate of technological progress. Estimation problems are addressed by using the System GMM Estimator and a coefficient bound provided by the OLS and within group estimator. Although we find evidence of conditional convergence for both the periods, relative to the estimated convergence speed for other regions and countries, China's provincial convergence speeds are surprisingly low: 0.414% for the pre-reform period and 2.23% for the reform period. This means that, despite China's remarkable economic growth, the provincial income converg ence process has been disappointing.

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Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0010.

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Date of creation: Nov 2000
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Handle: RePEc:cam:camdae:0010

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Related research
Keywords: Provincial convergence; China; panel data; GMM estimators;

Find related papers by JEL classification:
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - Semiparametric and Nonparametric Methods
H4 - Public Economics - - Publicly Provided Goods

References listed on IDEAS
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Aroca, Patricio & Guo, Dong & Hewings, Geoffrey J.D., 2006. "Spatial Convergence in China: 1952-99," Working Papers RP2006/89, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  2. Reuter & Ulrich, 2004. "The Effects of Intraregional Disparities on Regional Development in China: Inequality Decomposition and Panel-Data Analysis," Econometric Society 2004 Far Eastern Meetings 716, Econometric Society. [Downloadable!]
  3. Gries, Thomas & Redlin, Margarete, 2008. "International Integration and Regional Development in China," Working Papers RP2008/66, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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