Why is Chinese Regional Output Diverging?
In a recent paper Pedroni and Yao (2006) present strong evidence suggesting that Chinese regional output is diverging, a result that flies in the face of the current opinion of Chinese policymakers. This paper provides an in-depth analysis of the reasoning behind this finding. Our main result is that divergence does exist, even when new data and more advanced methods of analysis are used. We also find that it has both an idiosyncratic and a common component. Hence, the increased output inequalities observed at the regional level are due to both region-specific disparities and to disparities between clubs of regions.
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|Date of creation:||29 Oct 2008|
|Date of revision:||03 Dec 2008|
|Publication status:||Published as Westerlund, Joakim, David Edgerton and Sonja Opper, 'Why is Chinese Provincial Output Diverging?' in Journal of Asian Economics, 2010, pages 333-344.|
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