Using techniques of spatial econometrics, this paper investigates ƒÐ-convergence of provincial real per capita gross domestic product (GDP) in China. The empirical evidence concludes that spatial dependence across regions is strong enough to distort the traditional measure of ƒÐ-convergence. This study focuses on the variation of per capita GDP that is dependent on the development processes of neighboring provinces and cities. This refinement of the conditional ƒÐ-convergence model specification allows for analysis of spatial dependence in the mean and variance. The corrected measure of ƒÐ-convergence in China indicates a lower level of dispersion in the economic development process. This implies a smaller divergence in real per capita GDP, although convergence across regions is still a challenging goal to achieve in the 2000s.
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Paper provided by Institute of Economic Research, Hitotsubashi University in its series Hi-Stat Discussion Paper Series with number
d05-155.
Find related papers by JEL classification: C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East R11 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Analysis of Growth, Development, and Changes
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