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Why is Chinese provincial output diverging?

  • Westerlund, Joakim
  • Edgerton, David L.
  • Opper, Sonja

In a recent paper Pedroni and Yao (2006) present strong evidence suggesting that Chinese provincial per-capita output is diverging, a result that goes against the Chinese government's goal of a balanced wealth-creation across provinces. This paper provides an in-depth analysis of the reasoning behind this finding. Our main result is that the divergence does exist, even when new data and more advanced methods of analysis are used. We also find that it has both an idiosyncratic and a common component. Hence, the increased per-capita output inequalities observed at the provincial level is due to both province-specific disparities and to disparities between groups of provinces.

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Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 21 (2010)
Issue (Month): 4 (August)
Pages: 333-344

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Handle: RePEc:eee:asieco:v:21:y:2010:i:4:p:333-344
Contact details of provider: Web page: http://www.elsevier.com/locate/asieco

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