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Economic Reform, Growth and Convergence in China

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  • Esfandiar Maasoumi
  • Le Wang

Abstract

In this paper, we propose a new concept of convergence which is based on the metric entropy measure recently proposed by Granger et al. (2004, Journal of Time Series Analysis 25, 649--69) to investigate economic convergence in China. This entropy measure compares whole distributions of growth rates across individual provinces. Separately, based on this same entropy measure, we also implement cluster analysis to identify any convergence clubs. Our four main conclusions are: (1) while we certainly reject the null hypothesis that there exists a nationwide convergence, we do find that there exist convergence clubs for both the pre- and post-reform periods, (2) we find a number of very small convergence clubs. In particular, there are eleven and six convergence clubs for the pre- and post-reform periods, respectively, (3) in comparing the number and size of convergence clubs for both the pre- and post-reform periods, it could be argued that the extent of convergence is more prevalent during the post-reform period than during the pre-reform period and (4) convergence groups cannot be simply characterized by such unique features as region or the extent of policy preference level that are commonly used in the literature. Copyright Royal Economic Society 2008

Suggested Citation

  • Esfandiar Maasoumi & Le Wang, 2008. "Economic Reform, Growth and Convergence in China," Econometrics Journal, Royal Economic Society, vol. 11(1), pages 128-154, March.
  • Handle: RePEc:ect:emjrnl:v:11:y:2008:i:1:p:128-154
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    8. Ma, Hengyun & Oxley, Les, 2012. "The emergence and evolution of regional convergence clusters in China's energy markets," Energy Economics, Elsevier, vol. 34(1), pages 82-94.
    9. David Sondermann, 2014. "Productivity in the euro area: any evidence of convergence?," Empirical Economics, Springer, vol. 47(3), pages 999-1027, November.
    10. Bandyopadhyay, Sanghamitra, 2012. "Convergence clubs in incomes across Indian states: Is there evidence of a neighbours’ effect?," Economics Letters, Elsevier, vol. 116(3), pages 565-570.
    11. Dai, Feng & Li, Pengpeng & Liang, Ling, 2016. "Long-term economic growth under environmental pressure: An optimal path," The Quarterly Review of Economics and Finance, Elsevier, vol. 59(C), pages 15-24.
    12. Hao, Yu & Liu, Yiming & Weng, Jia-Hsi & Gao, Yixuan, 2016. "Does the Environmental Kuznets Curve for coal consumption in China exist? New evidence from spatial econometric analysis," Energy, Elsevier, vol. 114(C), pages 1214-1223.
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    14. Mihaela SIMIONESCU, 2014. "The economic convergence in European Union based on concentration and entropy approach," EuroEconomica, Danubius University of Galati, issue 1(33), pages 31-42, May.
    15. Hongyi Li & Huang Liang, 2010. "Health, education, and economic growth in East Asia," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 3(2), pages 110-131, June.
    16. Jahan, Sumbul, 2013. "Does Convergence Exist?," MPRA Paper 48836, University Library of Munich, Germany.
    17. Hao, Yu & Zhang, Zong-Yong & Liao, Hua & Wei, Yi-Ming, 2015. "China’s farewell to coal: A forecast of coal consumption through 2020," Energy Policy, Elsevier, vol. 86(C), pages 444-455.
    18. M. Herrerías, 2012. "Weighted convergence and regional growth in China: an alternative approach (1952–2008)," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 685-718, December.
    19. Uzma Afzal, 2012. "Human Capital Convergence: Evidence from the Punjab," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(1), pages 45-61, Jan-June.
    20. Sumie Sato & Mototsugu Fukushige, 2010. "The Chinese Economy and Income Inequality among East Asian Countries," Discussion Papers in Economics and Business 10-06, Osaka University, Graduate School of Economics.
    21. Sousa, Cândido T. & Pereira, Elisabeth T., 2012. "A Contribution to the Empirics of Convergence: the Case of the European State Members," MPRA Paper 62017, University Library of Munich, Germany.
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    23. Thomas Herzfeld, 2008. "Inter-regional output distribution: a comparison of Russian and Chinese experience," Post-Communist Economies, Taylor & Francis Journals, vol. 20(4), pages 431-447.

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    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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