Regional Income Divergence in China
AbstractNumerous policy studies have argued that conditions have prevailed in China since the open door economic reforms of the late 1970s that have encouraged rapid growth at the expense of regional income inequality across the provinces of China. In this paper we use recently developed nonstationary panel techniques to provide empirical support for the fact that the long run tendency since the reforms has been for provincial level incomes to continue to diverge. More importantly, we show that this divergence cannot be attributed to the presence of separate, regional convergence clubs divided among common geographic subgroupings such as the coastal versus interior provinces. Furthermore, we also show that the divergence cannot be attributed to differences in the degree of preferential open-door policies. Rather, we find that the divergence is pervasive both nationally and within these various regional and political subgroupings. We argue that these results point to other causes for regional income divergence, and they also carry potentially important implications for other regions of the world.
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Bibliographic InfoPaper provided by Department of Economics, Williams College in its series Department of Economics Working Papers with number 2005-03.
Length: 39 pages
Date of creation: Aug 2005
Date of revision:
Publication status: published in Journal of Asian Economics, April 2006, v. 17, iss. 2, pp. 294-315.
Other versions of this item:
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
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