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Income per capita inequality in China: The Role of Economic Geography and Spatial Interactions

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  • Laura Hering

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

  • Sandra Poncet

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)

Abstract

This paper contributes to the analysis of growing income disparities within China. Based on a structural model of economic geography using data on per capita income, we evaluate the extent to which market proximity and spatial dependence can explain growing income inequality between Chinese cities. We rely on a data set of 195 Chinese cities between 1995 and 2002. Our econometric specification incorporates an explicit consideration of spatial dependence effects in the form of spatially lagged per capita income. We provide evidence that the geography of access to markets is statistically significant in explaining variation in per capita income in China, especially so in provinces with low migration inflows which is coherent with NEG theory.

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Bibliographic Info

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number hal-00633899.

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Date of creation: 2010
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Publication status: Published, World Economy, 2010, 33, 5, 655-679
Handle: RePEc:hal:cesptp:hal-00633899

Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00633899
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  1. Giuseppe De Arcangelis & Giordano Mion, 2002. "Spatial Externalities and Empirical Analysis: The case of Italy," series, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari 0006, Dipartimento di Scienze Economiche e Metodi Matematici - Università di Bari, revised Jan 2002.
  2. Meng, Xin & Gregory, Bob & Wang, Youjuan, 2005. "Poverty, Inequality, and Growth in Urban China, 1986-2000," IZA Discussion Papers 1452, Institute for the Study of Labor (IZA).
  3. Krugman, Paul & Venables, Anthony J., 1994. "Globalization and the Inequality of Nations," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1015, C.E.P.R. Discussion Papers.
  4. José De Sousa & Sandra Poncet, 2011. "How are wages set in Beijing," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers), HAL hal-00633752, HAL.
  5. Cletus C. Coughlin & Eran Segev, 2000. "Foreign Direct Investment in China: A Spatial Econometric Study," The World Economy, Wiley Blackwell, Wiley Blackwell, vol. 23(1), pages 1-23, 01.
  6. Maria Abreu & Henri L.F. de Groot & Raymond J.G.M. Florax, 2004. "Space and Growth," Tinbergen Institute Discussion Papers, Tinbergen Institute 04-129/3, Tinbergen Institute.
  7. repec:fth:iniesr:430 is not listed on IDEAS
  8. Laura Hering & Sandra Poncet, 2010. "Market access and individual wages: evidence from China," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers), HAL hal-00633785, HAL.
  9. Bernard Fingleton, 2004. "The new economic geography versus urban economics : an evaluation using local wage rates in Great Britain," ERSA conference papers ersa04p638, European Regional Science Association.
  10. Shang-Jin Wei, 1996. "Intra-National versus International Trade: How Stubborn are Nations in Global Integration?," NBER Working Papers 5531, National Bureau of Economic Research, Inc.
  11. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0284, National Bureau of Economic Research, Inc.
  12. Au, Chun-Chung & Henderson, J. Vernon, 2006. "How migration restrictions limit agglomeration and productivity in China," Journal of Development Economics, Elsevier, Elsevier, vol. 80(2), pages 350-388, August.
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Cited by:
  1. Hering, Laura & Poncet, Sandra, 2009. "The impact of economic geography on wages: Disentangling the channels of influence," China Economic Review, Elsevier, Elsevier, vol. 20(1), pages 1-14, March.
  2. Julian Hinz, 2012. "The economic geography of Europe and the role of regional policy," Post-Print, HAL dumas-00802143, HAL.
  3. Roberts, Mark & Deichmann, Uwe & Fingleton, Bernard & Shi, Tuo, 2012. "Evaluating China's road to prosperity: A new economic geography approach," Regional Science and Urban Economics, Elsevier, Elsevier, vol. 42(4), pages 580-594.
  4. Herrmann-Pillath, Carsten & Libman, Alexander & Yu, Xiaofan, 2014. "Economic integration in China: Politics and culture," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 470-492.
  5. Bosker, Maarten & Brakman, Steven & Garretsen, Harry & Schramm, Marc, 2012. "Relaxing Hukou: Increased labor mobility and China’s economic geography," Journal of Urban Economics, Elsevier, vol. 72(2), pages 252-266.
  6. Roberts, Mark & Deichmann, Uwe & Fingleton, Bernard & Shi, Tuo, 2010. "On the road to prosperity ? The economic geography of China's national expressway network," Policy Research Working Paper Series 5479, The World Bank.

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