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Regional Divergence of per capita GDP in China: 1991-99

  • Zheng Wang
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    Using China's regional data from 1991 to 1999, this paper investigates inter-regional income inequalities. GMM estimation has been used to explore a dynamic panel data model based on the Solow growth model. We find that regions conditionally converge to their own steady states at an annual rate of 8%, indicating around 8 years for a region to halve the deviation from its balanced growth path. However, the panel data exploration of convergence could not explain the catching up phenomenon. To see whether poorer regions can grow faster than richer ones, sigma and absolute beta divergence have been employed. We find that when the regional income gap enlarges during the 1990s, the initially poor regions do not catch up with the initially rich regions.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/14760280310001631372
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    Article provided by Taylor & Francis Journals in its journal Journal of Chinese Economic and Business Studies.

    Volume (Year): 2 (2004)
    Issue (Month): 1 ()
    Pages: 39-53

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    Handle: RePEc:taf:jocebs:v:2:y:2004:i:1:p:39-53
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    1. Chen, Baizhu & Feng, Yi, 2000. "Determinants of economic growth in China: Private enterprise, education, and openness," China Economic Review, Elsevier, vol. 11(1), pages 1-15.
    2. Jian, Tianlun & Sachs, Jeffrey D. & Warner, Andrew M., 1996. "Trends in regional inequality in China," China Economic Review, Elsevier, vol. 7(1), pages 1-21.
    3. Kevin Lee & M. Hashem Pesaran & Ron Smith, . "Growth and Convergence in a Multi-County empirical Stochastic Solow Model," Discussion Papers in Economics 96/14, Department of Economics, University of Leicester.
    4. Bernard, Andrew B. & Durlauf, Steven N., 1996. "Interpreting tests of the convergence hypothesis," Journal of Econometrics, Elsevier, vol. 71(1-2), pages 161-173.
    5. Durlauf,S.N. & Quah,D.T., 1998. "The new empirics of economic growth," Working papers 3, Wisconsin Madison - Social Systems.
    6. Mankiw, N Gregory & Romer, David & Weil, David N, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 107(2), pages 407-37, May.
    7. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. " Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-89, September.
    8. Chen, Jian & Fleisher, Belton M., 1996. "Regional Income Inequality and Economic Growth in China," Journal of Comparative Economics, Elsevier, vol. 22(2), pages 141-164, April.
    9. Yao, Shujie & Zhang, Zongyi, 2001. "On Regional Inequality and Diverging Clubs: A Case Study of Contemporary China," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 466-484, September.
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