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Inter-Region Transportation Costs, Regional Economic Growth, and Disparities in China

Author

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  • Zhaomin Zhang

    (School of Management, Shenzhen Polytechnic, Shenzhen 518000, China)

Abstract

To examine the correlation between regional economic growth and inter-region transportation costs in China, this study establishes a regional economic growth model embedded with inter-region transportation costs based on the Cobb-Douglas production function. Based on a balanced growth empirical model, this study verifies the correlation by conducting a regression analysis of the panel data of 29 provinces, municipalities, and autonomous regions from 1985 to 2015. The empirical results show that: (1) The per capita GDP growth among the three regions (namely, the eastern, central, and western regions of China) meets a conditional convergence trend, and the decreasing of the inter-region transportation costs increases the convergence speed; (2) The per capita GDP growth is in line with the club convergence trend within each of the three regions; (3) The trend of the output elasticity of the inter-region transportation costs shows that the gradual decrease of inter-region transportation costs has a positive correlation with the narrowing of economic disparity after the year 2000, accelerating "common prosperity" across different regions in China.

Suggested Citation

  • Zhaomin Zhang, 2020. "Inter-Region Transportation Costs, Regional Economic Growth, and Disparities in China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 15(2), pages 282-311, June.
    • Handle: RePEc:fec:journl:v:15:y:2020:i:2:p:282-311
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    File URL: http://journal.hep.com.cn/fec/EN/10.3868/s060-011-020-0013-0
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    More about this item

    Keywords

    inter-region transportation costs; regional economic growth; growth differentials; panel data;
    All these keywords.

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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