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Innovation and regional economic convergence: evidence from China

Author

Listed:
  • Ping Feng

    (Changsha University of Science and Technology)

  • Mahmut Yasar

    (The University of Texas at Arlington)

  • Roderick M. Rejesus

    (North Carolina State University)

Abstract

Reducing regional economic disparities in China is an important task to facilitate inclusive and sustainable long-term economic growth. This paper investigates the role of technological innovation in facilitating regional economic convergence in China (i.e., narrowing the gap between more developed and less developed provinces). We utilize a province-level panel data set from 1998 to 2017 to calculate the so-called sigma (σ) and beta (β) regional economic convergence indexes, which allows us to examine the patterns of convergence in China over time. In particular, we use panel data regression models to calculate β indexes and examine how various measures of technological innovation influence regional economic convergence in China. Findings from our empirical analysis suggest that the provincial economies were diverging from 1998 to 2006. However, we observe regional economic convergence in China after 2006. Moreover, we find that technological innovation promoted regional economic convergence post-2006, and there is evidence that technological innovation spills over and benefits nearby surrounding provinces. We also find that transfer payments made by the Chinese central government to the provinces help boost regional economic growth and narrow regional economic disparities.

Suggested Citation

  • Ping Feng & Mahmut Yasar & Roderick M. Rejesus, 2024. "Innovation and regional economic convergence: evidence from China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 72(2), pages 535-559, February.
    • Handle: RePEc:spr:anresc:v:72:y:2024:i:2:d:10.1007_s00168-023-01210-9
    DOI: 10.1007/s00168-023-01210-9
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    More about this item

    JEL classification:

    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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