Advanced Search
MyIDEAS: Login to save this paper or follow this series

The Effects of Intraregional Disparities on Regional Development in China: Inequality Decomposition and Panel-Data Analysis

Contents:

Author Info

  • Reuter
  • Ulrich
Registered author(s):

    Abstract

    This paper analyzes the development and effects of intra-provincial regional disparities in China between 1989 and 2001. A decomposition analysis shows that intraprovincial disparities contribute significantly to total regional inequality. In the second part of the paper, the impact of the observed intraprovincial disparities on regional economic development is addressed. Using provincial panel data on industrial growth, capital and employment, the impact of inequality on industrial growth is estimated as affecting technical efficiency and level of technology. The results show a significant positive effect of intra-provincial disparities on provincial industrial growth, with causality from inequality to growth. Moreover, it appears that the inequality-growth relationship is not a linear one, but rather that the impact of extreme changes in inequality is stronger and more significant than a moderate increase in inequality. These outcomes are robust to alternative model specifications and control variabl

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://repec.org/esFEAM04/up.26042.1080729129.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Econometric Society in its series Econometric Society 2004 Far Eastern Meetings with number 716.

    as in new window
    Length:
    Date of creation: 11 Aug 2004
    Date of revision:
    Handle: RePEc:ecm:feam04:716

    Contact details of provider:
    Phone: 1 212 998 3820
    Fax: 1 212 995 4487
    Email:
    Web page: http://www.econometricsociety.org/pastmeetings.asp
    More information through EDIRC

    Related research

    Keywords: Inequality; Decomposition; Growth; Panel Data; China;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Knight, J. & Song, L., 1990. "The Spatial Contribution To Income Inequality In Rural China," Economics Series Working Papers 99106, University of Oxford, Department of Economics.
    2. Mirrlees, James A, 1971. "An Exploration in the Theory of Optimum Income Taxation," Review of Economic Studies, Wiley Blackwell, vol. 38(114), pages 175-208, April.
    3. Lu, Ding, 2002. "Rural-urban income disparity: impact of growth, allocative efficiency, and local growth welfare," China Economic Review, Elsevier, vol. 13(4), pages 419-429, December.
    4. Aghion, Philippe & Caroli, Eve & Garcia-Penalosa, Cecilia, 1999. "Inequality and economic growth: the perspective of the new growth theories," CEPREMAP Working Papers (Couverture Orange) 9908, CEPREMAP.
    5. Savvides, A. & Stengos, T., 2000. "Income Inequality and Economic Development: Evidence from the Threshold Regression Model," Working Papers 2000-2, University of Guelph, Department of Economics and Finance.
    6. Galor, Oded & Zeira, Joseph, 1988. "Income Distribution and Macroeconomics," MPRA Paper 51644, University Library of Munich, Germany, revised 01 Sep 1989.
    7. Hongyi Li & Heng-fu Zou, 1998. "Income Inequality Is Not Harmful for Growth: Theory and Evidence," CEMA Working Papers 74, China Economics and Management Academy, Central University of Finance and Economics.
    8. Persson, Torsten & Tabellini, Guido, 1992. "Growth, distribution and politics," European Economic Review, Elsevier, vol. 36(2-3), pages 593-602, April.
    9. Takahiro Akita, 2000. "Decomposing Regional Income Inequality Using Two-Stage Nested Theil Decomposition Method," Working Papers EMS_2000_02, Research Institute, International University of Japan.
    10. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    11. Fields, Gary S & Fei, John C H, 1978. "On Inequality Comparisons," Econometrica, Econometric Society, vol. 46(2), pages 303-16, March.
    12. Ravallion, Martin, 1998. "Does aggregation hide the harmful effects of inequality on growth?," Economics Letters, Elsevier, vol. 61(1), pages 73-77, October.
    13. Takahiro Akita, 2003. "Decomposing regional income inequality in China and Indonesia using two-stage nested Theil decomposition method," The Annals of Regional Science, Springer, vol. 37(1), pages 55-77, 02.
    14. Shang-Jin Wei & Yi Wu, 2001. "Globalization and Inequality: Evidence from Within China," NBER Working Papers 8611, National Bureau of Economic Research, Inc.
    15. Kristin J. Forbes, 2000. "A Reassessment of the Relationship between Inequality and Growth," American Economic Review, American Economic Association, vol. 90(4), pages 869-887, September.
    16. Tsui Kai-yuen, 1993. "Decomposition of China's Regional Inequalities," Journal of Comparative Economics, Elsevier, vol. 17(3), pages 600-627, September.
    17. Rodrik, Dani & Alesina, Alberto, 1994. "Distributive Politics and Economic Growth," Scholarly Articles 4551798, Harvard University Department of Economics.
    18. Cowell, F.A., 2000. "Measurement of inequality," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 2, pages 87-166 Elsevier.
    19. Alesina, Alberto & Perotti, Roberto, 1996. "Income distribution, political instability, and investment," European Economic Review, Elsevier, vol. 40(6), pages 1203-1228, June.
    20. Champernowne, D G, 1974. "A Comparison of Measures of Inequality of Income Distribution," Economic Journal, Royal Economic Society, vol. 84(336), pages 787-816, December.
    21. Clarke, George R. G., 1992. "More evidence on income distribution and growth," Policy Research Working Paper Series 1064, The World Bank.
    22. Khan, Azizur Rahman & Riskin, Carl, 2001. "Inequality and Poverty in China in the Age of Globalization," OUP Catalogue, Oxford University Press, number 9780195136494, October.
    23. Balisacan, Arsenio M. & Fuwa, Nobuhiko, 2003. "Growth, inequality and politics revisited: a developing-country case," Economics Letters, Elsevier, vol. 79(1), pages 53-58, April.
    24. Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc.
    25. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years Of Regional Inequality In China: A Journey Through Revolution, Reform And Openness," Working Papers 7236, Cornell University, Department of Applied Economics and Management.
    26. Tsui, Kai-yuen, 1996. "Economic reform and interprovincial inequalities in China," Journal of Development Economics, Elsevier, vol. 50(2), pages 353-368, August.
    27. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    28. Gustafsson, Bjorn & Shi, Li, 2002. "Income inequality within and across counties in rural China 1988 and 1995," Journal of Development Economics, Elsevier, vol. 69(1), pages 179-204, October.
    29. Kuan Xu, 2003. "How Has the Literature on Gini's Index Evolved in the Past 80 Years?," Department of Economics at Dalhousie University working papers archive howgini, Dalhousie, Department of Economics.
    30. Yudon, Y. & Weeks, M., 2000. "Provincial Income Convergence in China, 1953-1997: a Panel Data Approach," Cambridge Working Papers in Economics 0010, Faculty of Economics, University of Cambridge.
    31. Lee, Jongchul, 2000. "Changes in the source of China's regional inequality," China Economic Review, Elsevier, vol. 11(3), pages 232-245.
    32. Chen, Baizhu & Feng, Yi, 2000. "Determinants of economic growth in China: Private enterprise, education, and openness," China Economic Review, Elsevier, vol. 11(1), pages 1-15.
    33. Song, Shunfeng & Chu, George S. -F. & Chao, Rongqing, 2000. "Intercity regional disparity in China," China Economic Review, Elsevier, vol. 11(3), pages 246-261.
    34. Knight, J. & Shi, L. & Renwei, Z., 1999. "A Spatial Analysis of Wages and Incomes in Urban China: Divergent Means, Convergent Inequality," Economics Series Working Papers 99209, University of Oxford, Department of Economics.
    35. Kanbur, Ravi & Zhang, Xiaobo, 1999. "Which Regional Inequality? The Evolution of Rural-Urban and Inland-Coastal Inequality in China from 1983 to 1995," Journal of Comparative Economics, Elsevier, vol. 27(4), pages 686-701, December.
    36. T. N. Srinivasan & Jagdish Bhagwati, 1999. "Outward-Orientation and Development: Are Revisionists Right," Working Papers 806, Economic Growth Center, Yale University.
    37. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
    38. Galor, Oded, 2000. "Income distribution and the process of development," European Economic Review, Elsevier, vol. 44(4-6), pages 706-712, May.
    39. Demurger, Sylvie, 2001. "Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 95-117, March.
    40. Takahiro Akita, 2001. "Regional Income Inequality in China: A Two-Stage Nested Inequality Decomposition Analysis," Working Papers EMS_2001_05, Research Institute, International University of Japan.
    41. Hare, Denise & West, Loraine A., 1999. "Spatial Patterns in China's Rural Industrial Growth and Prospects for the Alleviation of Regional Income Inequality," Journal of Comparative Economics, Elsevier, vol. 27(3), pages 475-497, September.
    42. Scharping, Thomas, 2001. "Hide-and-seek: China's elusive population data," China Economic Review, Elsevier, vol. 12(4), pages 323-332.
    43. Perotti, Roberto & Alesina, Alberto, 1996. "Income Distribution, Political Instability, and Investment," Scholarly Articles 4553018, Harvard University Department of Economics.
    44. Bao, Shuming & Chang, Gene Hsin & Sachs, Jeffrey D. & Woo, Wing Thye, 2002. "Geographic factors and China's regional development under market reforms, 1978-1998," China Economic Review, Elsevier, vol. 13(1), pages 89-111.
    45. Holz, Carsten A. & Lin, Yi-min, 2001. "The 1997-1998 break in industrial statistics: Facts and appraisal," China Economic Review, Elsevier, vol. 12(4), pages 303-316.
    46. West, Loraine A & Wong, Christine P W, 1995. "Fiscal Decentralization and Growing Regional Disparities in Rural China: Some Evidence in the Provision of Social Services," Oxford Review of Economic Policy, Oxford University Press, vol. 11(4), pages 70-84, Winter.
    47. Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ecm:feam04:716. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.