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Growth dynamics and conditional convergence among Chinese provinces: a panel data investigation using system GMM estimator

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  • Céline BONNEFOND

Abstract

The paper aims at contributing to the debate on conditional convergence across Chinese provinces by using the most recent techniques of dynamics panel data models. The analysis covers twenty nine Chinese provinces from 1995 to 2009 and is based on the estimation of growth equations using system GMM estimator. Three main results can be drawn from the empirical investigations conducted as part of this study. First, investment in physical capital and education have played an important role in promoting economic growth and may be considered as mean of reducing regional disparities. Second, the hypothesis of conditional convergence is verified over the period 1995-2009. Third, the speed of convergence is found to be faster during the period 2004-2009, which indicates that Chinese provinces have converged more quickly over the most recent period. We suggest that this result may be a consequence of the implementation of regional development programs during the 2000s, and that it may also reflect the existence of growth spillover effects.

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  • Céline BONNEFOND, 2013. "Growth dynamics and conditional convergence among Chinese provinces: a panel data investigation using system GMM estimator," Cahiers du GREThA (2007-2019) 2013-23, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
  • Handle: RePEc:grt:wpegrt:2013-23
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    3. Peng Bin & Andrea Fracasso, 2017. "Regional Consumption Inequality in China: An Oaxaca-Blinder Decomposition at the Prefectural Level," Growth and Change, Wiley Blackwell, vol. 48(3), pages 459-486, September.
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    5. Stephanié Rossouw & Talita Greyling, 2017. "Regional disparities in non-economic quality of life in South Africa: convergence or divergence?," Working Papers 2017-06, Auckland University of Technology, Department of Economics.
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    7. SAHIBI, YOUNESS & HAMZAOUI, Moustapha, 2016. "Local fiscal policy and poverty reduction," MPRA Paper 84568, University Library of Munich, Germany.
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    More about this item

    Keywords

    China; regional disparities; growth; conditional convergence; dynamic panel data; system GMM;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P25 - Economic Systems - - Socialist Systems and Transition Economies - - - Urban, Rural, and Regional Economics
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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