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A Spatial Investigation of σ-Convergence in China

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  • Kuan-Pin Lin
  • Zhi-He Long
  • Mei Wu

Abstract

Using techniques of spatial econometrics, this paper investigates σ-convergence of provincial real per capita gross domestic product (GDP) in China. The empirical evidence concludes that spatial dependence across regions is strong enough to distort the traditional measure of σ-convergence. This study focuses on the variation of per capita GDP that is dependent on the development processes of neighboring provinces and cities. This refinement of the conditional σ-convergence model specification allows for analysis of spatial dependence in the mean and variance. The corrected measure of σ-convergence in China indicates a lower level of dispersion in the economic development process. This implies a smaller divergence in real per capita GDP, although convergence across regions is still a challenging goal to achieve in the 2000s.

Suggested Citation

  • Kuan-Pin Lin & Zhi-He Long & Mei Wu, 2006. "A Spatial Investigation of σ-Convergence in China," Hi-Stat Discussion Paper Series d05-155, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hst:hstdps:d05-155
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    File URL: http://hi-stat.ier.hit-u.ac.jp/research/discussion/2005/pdf/D05-155.pdf
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    References listed on IDEAS

    as
    1. 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.
    2. H. Kelejian, Harry & Prucha, Ingmar R., 2001. "On the asymptotic distribution of the Moran I test statistic with applications," Journal of Econometrics, Elsevier, vol. 104(2), pages 219-257, September.
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    More about this item

    Keywords

    σ-Convergence; Moran's index; spatial dependence; spatial lag;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • 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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