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Provincial Conditional Income Convergence in China, 1953-1997: A Panel Data Approach

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  • Melvyn Weeks
  • James Yudong Yao

Abstract

This paper examines the tendency towards income convergence among China's main provinces during the two periods: the pre-reform period 1953-1977 and the reform period 1978-1997 using the framework of the Solow growth model. The panel data method accounts for not only province-specific initial technology level but also the heterogeneity of the technological progress rate between the fast-growing coastal and interior provinces. Estimation problems of weak instruments and endogeneity are addressed by the use of a system generalized method of moments (GMM) estimator. The main empirical finding is that there is a system-wide income divergence during the reform period because the coastal provinces do not share a common technology progress rate with the interior provinces.

Suggested Citation

  • Melvyn Weeks & James Yudong Yao, 2003. "Provincial Conditional Income Convergence in China, 1953-1997: A Panel Data Approach," Econometric Reviews, Taylor & Francis Journals, vol. 22(1), pages 59-77, February.
  • Handle: RePEc:taf:emetrv:v:22:y:2003:i:1:p:59-77 DOI: 10.1081/ETC-120017974
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    Cited by:

    1. Herrerias, M.J. & Ordoñez, J., 2012. "New evidence on the role of regional clusters and convergence in China (1952–2008)," China Economic Review, Elsevier, vol. 23(4), pages 1120-1133.
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    3. Elliott, Robert J.R. & Zhou, Ying, 2015. "Co-location and Spatial Wage Spillovers in China: The Role of Foreign Ownership and Trade," World Development, Elsevier, vol. 66(C), pages 629-644.
    4. Hao, Yu & Liao, Hua & Wei, Yi-Ming, 2015. "Is China’s carbon reduction target allocation reasonable? An analysis based on carbon intensity convergence," Applied Energy, Elsevier, pages 229-239.
    5. Daoqin TONG & Sandy DALL’ERBA, 2008. "Spatial Disparities In The Chinese Ict Sector: A Regional Analysis," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 28, pages 111-129.
    6. 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.
    7. Breinlich, Holger & Ottaviano, Gianmarco I.P. & Temple, Jonathan R.W., 2014. "Regional Growth and Regional Decline," Handbook of Economic Growth,in: Handbook of Economic Growth, edition 1, volume 2, chapter 4, pages 683-779 Elsevier.
    8. repec:spr:qualqt:v:51:y:2017:i:5:d:10.1007_s11135-016-0386-2 is not listed on IDEAS
    9. Hao, Yu & Liao, Hua & Wei, Yi-Ming, 2015. "Is China’s carbon reduction target allocation reasonable? An analysis based on carbon intensity convergence," Applied Energy, Elsevier, pages 229-239.
    10. He, Qichun, 2011. "Home-bias Politics, Financial Deregulation and Economic Growth: A Causal Relationship," MPRA Paper 34482, University Library of Munich, Germany.
    11. He, Qichun, 2011. "Dances with Chinese data: are the reform period Chinese provincial panel data reliable?," MPRA Paper 35418, University Library of Munich, Germany.
    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.
    13. Celine Bonnefond, 2014. "Growth Dynamics And Conditional Convergence Among Chinese Provinces: A Panel Data Investigation Using System Gmm Estimator," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(4), pages 1-25, December.
    14. Qichun He, 2011. "Does FDI Promote Human Capital Accumulation? The Role of Gradual Financial Liberalization," CEMA Working Papers 455, China Economics and Management Academy, Central University of Finance and Economics.
    15. Johan Lyhagen & Johanna Rickne, 2014. "Income inequality between Chinese regions: newfound harmony or continued discord?," Empirical Economics, Springer, pages 93-110.
    16. Ankita Mishra & Vinod Mishra, 2016. "Is there a conditional convergence in the per capita incomes of BIMAROU states in India?," Monash Economics Working Papers 03-16, Monash University, Department of Economics.
    17. Cheong, Tsun Se & Wu, Yanrui, 2013. "Regional disparity, transitional dynamics and convergence in China," Journal of Asian Economics, Elsevier, pages 1-14.
    18. Wang, Yiming & Zhang, Pei & Huang, Dake & Cai, Changda, 2014. "Convergence behavior of carbon dioxide emissions in China," Economic Modelling, Elsevier, vol. 43(C), pages 75-80.
    19. Zhaofang Chu, 2012. "Logistics and economic growth: a panel data approach," The Annals of Regional Science, Springer;Western Regional Science Association, pages 87-102.
    20. Johan Lyhagen & Johanna Rickne, 2014. "Income inequality between Chinese regions: newfound harmony or continued discord?," Empirical Economics, Springer, pages 93-110.
    21. Mohamed Ilyes Gritli & Fatma Marrakchi Charfi, 2016. "Capital Account, Institutional Quality, And Economic Growth In Mena Countries: A Gmm Approach," Annals of Financial Economics (AFE), World Scientific Publishing Co. Pte. Ltd., pages 1-23.
    22. Pei-Chien Lin & Chun-Hung Lin & I-Ling Ho, 2013. "Regional convergence or divergence in China? Evidence from unit root tests with breaks," The Annals of Regional Science, Springer;Western Regional Science Association, pages 223-243.
    23. Yang, Jun & Zhang, Tengfei & Sheng, Pengfei & Shackman, Joshua D., 2016. "Carbon dioxide emissions and interregional economic convergence in China," Economic Modelling, Elsevier, vol. 52(PB), pages 672-680.
    24. Mihaela Simionescu, 2015. "The Impact Of Economic Crisis On Inflation Convergence In The European Union. A Panel Data Approach," Journal Articles, Center For Economic Analyses, pages 37-46.

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