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Does China’s green economic recovery generate a spatial convergence trend: an explanation using agglomeration effects and fiscal instruments

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  • Qunxi Kong

    (Nanjing University of Finance and Economics)

  • Rongrong Li

    (Nanjing University of Finance and Economics)

  • Y. Ni

    (Nanjing University of Finance and Economics)

  • Dan Peng

    (Nanjing University)

Abstract

China’s urbanization process has entered a period of rapid development, and cities have become key to driving regional economic development. This paper uses data from 286 cities in China in the period 2005–2018 to construct an urban economic growth quality index system and examine the influence of spatial factors on the convergence trend of China’s urban economic growth quality. It is found that there is a β absolute convergence trend of economic growth quality in Chinese cities across the whole country. After controlling for the initial conditions of individual economies, spatial factors strengthen the spatial convergence trend of urban economic growth quality and significantly increase the corresponding convergence rate. Among the areas studied, the western region has the fastest convergence rate, followed by the central and eastern regions, and the convergence rates of both the central and western regions are higher than the national average. Agglomeration economies and fiscal policy tools are important for the promotion of the urban economic growth quality. The agglomeration of productive service industries significantly improves the spatial convergence rate of urban economic growth quality. This effect is mainly due to the spatial spillover of industrial agglomeration. The expansion of government fiscal expenditure also contributes to the spatial convergence trend of urban economic growth quality. Local economic growth quality is also affected by government fiscal expenditure in neighboring cities.

Suggested Citation

  • Qunxi Kong & Rongrong Li & Y. Ni & Dan Peng, 2022. "Does China’s green economic recovery generate a spatial convergence trend: an explanation using agglomeration effects and fiscal instruments," Economic Change and Restructuring, Springer, vol. 55(4), pages 2499-2526, November.
    • Handle: RePEc:kap:ecopln:v:55:y:2022:i:4:d:10.1007_s10644-022-09396-2
    DOI: 10.1007/s10644-022-09396-2
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    2. Qiaoli Xiao & Yue Wang, 2022. "Study on the Spatial Convergence Club and Growth Momentum of China’s Regional Economies," Sustainability, MDPI, vol. 14(19), pages 1-17, October.
    3. Xin‐Xin Zhao & Jun Wen & Xing‐Yun Zou & Quan‐jing Wang & Chun‐Ping Chang, 2023. "Strategies for the sustainable development of China in the post‐epidemic era," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 426-438, February.

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