IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Globalization and Regional Inequality

  • Tsun Se Cheong

    (Business School, University of Western Australia)

  • Yanrui Wu

    (Business School, University of Western Australia)

This paper examines the impacts of globalization on intra-provincial inequality in China. The empirical analysis is based on a dataset of Chinese counties and county-level cities. It is found that foreign direct investment (FDI) and intra-provincial regional inequality are negatively correlated, whereas the relationship between international trade and regional inequality is statistically insignificant. In addition, it is shown that the level of industrialization and service development in Chinese provinces has a positive effect on intra-provincial inequality. It implies that intra-provincial regional inequality will increase as the primary sector declines. The results also show that domestic trade is negatively correlated with regional inequality, whereas the transportation infrastructure has a positive effect on inequality in the country.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.business.uwa.edu.au/__data/assets/pdf_file/0005/2275772/13-10-Globalization-and-Regional-Inequality-in-China.pdf
Download Restriction: no

Paper provided by The University of Western Australia, Department of Economics in its series Economics Discussion / Working Papers with number 13-10.

as
in new window

Length: 40 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:uwa:wpaper:13-10
Contact details of provider: Postal: 35 Stirling Highway, Crawley, W.A. 6009
Phone: (08) 9380 2918
Fax: (08) 9380 1016
Web page: http://www.business.uwa.edu.au/school/disciplines/economics

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Axel Dreher & Noel Gaston, 2008. "Has Globalization Increased Inequality?," Review of International Economics, Wiley Blackwell, vol. 16(3), pages 516-536, 08.
  2. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
  3. Barro, R.J., 1989. "Economic Growth In A Cross Section Of Countries," RCER Working Papers 201, University of Rochester - Center for Economic Research (RCER).
  4. Michael Binder & Cheng Hsiao & M. Hashem Pesaran, 2000. "Estimation and Inference in Short Panel Vector Autoregressions with Unit Roots and Cointegration," Banco de Espa�a Working Papers 0005, Banco de Espa�a.
  5. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  6. Fan, Shenggen & Chan-Kang, Connie, 2008. "Regional road development, rural and urban poverty: Evidence from China," Transport Policy, Elsevier, vol. 15(5), pages 305-314, September.
  7. Fleisher, Belton M. & Li, Haizheng & Zhao, Min Qiang, 2007. "Human Capital, Economic Growth, and Regional Inequality in China," IZA Discussion Papers 2703, Institute for the Study of Labor (IZA).
  8. Lee, Jong-Eun, 2006. "Inequality and globalization in Europe," Journal of Policy Modeling, Elsevier, vol. 28(7), pages 791-796, October.
  9. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Globalization in Historical Perspective," NBER Books, National Bureau of Economic Research, Inc, number bord03-1, January.
  10. Fu, Xiaolan, 2004. "Limited linkages from growth engines and regional disparities in China," Journal of Comparative Economics, Elsevier, vol. 32(1), pages 148-164, March.
  11. David Greenaway & David Sapsford, 1994. "What does liberalisation do for exports and growth?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 130(1), pages 152-174, March.
  12. Shujie Yao, 1997. "Industrialization and spatial income inequality in rural China, 1986-92," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 5(1), pages 97-112, 05.
  13. Holtz-Eakin, Douglas & Newey, Whitney & Rosen, Harvey S, 1988. "Estimating Vector Autoregressions with Panel Data," Econometrica, Econometric Society, vol. 56(6), pages 1371-95, November.
  14. Rui Hao & Zheng Wei, 2010. "Fundamental causes of inland–coastal income inequality in post-reform China," The Annals of Regional Science, Springer, vol. 45(1), pages 181-206, August.
  15. 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.
  16. Beetsma, Roel & van der Ploeg, Frederick, 1992. "Does Inequality Cause Inflation? The Political Economy of Inflation, Taxation and Government Debt," CEPR Discussion Papers 741, C.E.P.R. Discussion Papers.
  17. Jane Golley, 2002. "Regional patterns of industrial development during China's economic transition," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 10(3), pages 761-801, November.
  18. Shang-Jin Wei & Yi Wu, 2001. "Globalization and Inequality: Evidence from Within China," NBER Working Papers 8611, National Bureau of Economic Research, Inc.
  19. Young, Alwyn, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 369-405, May.
  20. Richard Blundell & Steve Bond, 1995. "Initial conditions and moment restrictions in dynamic panel data models," IFS Working Papers W95/17, Institute for Fiscal Studies.
  21. Arellano, Manuel & Bover, Olympia, 1995. "Another look at the instrumental variable estimation of error-components models," Journal of Econometrics, Elsevier, vol. 68(1), pages 29-51, July.
  22. Steve Bond, 2002. "Dynamic panel data models: a guide to microdata methods and practice," CeMMAP working papers CWP09/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  23. Yao, S. & Zhang, Z., 1999. "Regional Growth in Chine under Economic Reforms," Papers 124, Portsmouth University - Department of Economics.
  24. Hao, Chen, 2006. "Development of financial intermediation and economic growth: The Chinese experience," China Economic Review, Elsevier, vol. 17(4), pages 347-362.
  25. Luiz de Mello, 1997. "Foreign direct investment in developing countries and growth: A selective survey," Journal of Development Studies, Taylor & Francis Journals, vol. 34(1), pages 1-34.
  26. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Introduction to "Globalization in Historical Perspective"," NBER Chapters, in: Globalization in Historical Perspective, pages 1-10 National Bureau of Economic Research, Inc.
  27. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
  28. Xiaoyun Liu & Terry Sicular, 2009. "Nonagricultural Employment Determinants and Income Inequality Decomposition," Chinese Economy, M.E. Sharpe, Inc., vol. 42(4), pages 29-43, July.
  29. Xu, Lixin Colin & Zou, Heng-fu, 2000. "Explaining the changes of income distribution in China," China Economic Review, Elsevier, vol. 11(2), pages 149-170, December.
  30. Wan, Guanghua, 2004. "Accounting for income inequality in rural China: a regression-based approach," Journal of Comparative Economics, Elsevier, vol. 32(2), pages 348-363, June.
  31. Greenaway, David & Morgan, Wyn & Wright, Peter, 2002. "Trade liberalisation and growth in developing countries," Journal of Development Economics, Elsevier, vol. 67(1), pages 229-244, February.
  32. Wan, Guanghua & Lu, Ming & Chen, Zhao, 2006. "Globalization and Regional Income Inequality: Empirical evidence from within China," Working Paper Series RP2006/139, World Institute for Development Economic Research (UNU-WIDER).
  33. David Roodman, 2009. "A Note on the Theme of Too Many Instruments," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 135-158, 02.
  34. Demurger, Sylvie, 2001. "Infrastructure Development and Economic Growth: An Explanation for Regional Disparities in China?," Journal of Comparative Economics, Elsevier, vol. 29(1), pages 95-117, March.
  35. Yiu Por Chen & Mingxing Liu & Qi Zhang, 2010. "Development of Financial Intermediation and the Dynamics of Urban-Rural Disparity in China, 1978-1998," Regional Studies, Taylor & Francis Journals, vol. 44(9), pages 1171-1187.
  36. Xiaobo Zhang & Kevin Zhang, 2003. "How Does Globalisation Affect Regional Inequality within A Developing Country? Evidence from China," Journal of Development Studies, Taylor & Francis Journals, vol. 39(4), pages 47-67.
  37. Montalvo, Jose G. & Ravallion, Martin, 2009. "The pattern of growth and poverty reduction in China," Policy Research Working Paper Series 5069, The World Bank.
  38. Fleisher, Belton M. & Chen, Jian, 1997. "The Coast-Noncoast Income Gap, Productivity, and Regional Economic Policy in China," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 220-236, October.
  39. 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.
  40. Al-Marhubi, Fahim, 1997. "A note on the link between income inequality and inflation," Economics Letters, Elsevier, vol. 55(3), pages 317-319, September.
  41. Xiaohui Liu & Peter Burridge & P. J. N. Sinclair, 2002. "Relationships between economic growth, foreign direct investment and trade: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 34(11), pages 1433-1440.
  42. Desai, Raj M. & Olofsgard, Anders & Yousef, Tarik M., 2005. "Inflation and inequality: does political structure matter?," Economics Letters, Elsevier, vol. 87(1), pages 41-46, April.
  43. Ran, Jimmy & Voon, Jan P. & Li, Guangzhong, 2007. "How does FDI affect China? Evidence from industries and provinces," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 774-799, December.
  44. Jr-Tsung Huang & Chun-Chien Kuo & An-Pang Kao, 2003. "The Inequality of Regional Economic Development in China between 1991 and 2001," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 1(3), pages 273-285.
  45. Tauchen, George, 1986. "Statistical Properties of Generalized Method-of-Moments Estimators of Structural Parameters Obtained from Financial Market Data," Journal of Business & Economic Statistics, American Statistical Association, vol. 4(4), pages 397-416, October.
  46. Ravi Kanbur & Xiaobo Zhang, 2005. "Fifty Years of Regional Inequality in China: a Journey Through Central Planning, Reform, and Openness," Review of Development Economics, Wiley Blackwell, vol. 9(1), pages 87-106, 02.
  47. Hongbin Cai & Yuyu Chen & Li-An Zhou, 2010. "Income and Consumption Inequality in Urban China: 1992-2003," Economic Development and Cultural Change, University of Chicago Press, vol. 58(3), pages 385-413, 04.
  48. Windmeijer, Frank, 2005. "A finite sample correction for the variance of linear efficient two-step GMM estimators," Journal of Econometrics, Elsevier, vol. 126(1), pages 25-51, May.
  49. Shujie Yao & Zongyi Zhang, 2002. "Economic growth and diverging clubs: a case study of the Chinese regions," Applied Economics Letters, Taylor & Francis Journals, vol. 9(12), pages 833-836.
  50. Haishun Sun & Ashok Parikh, 2001. "Exports, Inward Foreign Direct Investment (FDI) and Regional Economic Growth in China," Regional Studies, Taylor & Francis Journals, vol. 35(3), pages 187-196.
  51. Gustafsson, Björn & Sai, Ding, 2009. "Rank, income and income inequality in urban China," China Economic Review, Elsevier, vol. 20(3), pages 497-507, September.
  52. Yao, Shujie & Wei, Kailei, 2007. "Economic growth in the presence of FDI: The perspective of newly industrialising economies," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 211-234, March.
  53. Chen, Anping & Groenewold, Nicolaas, 2010. "Reducing regional disparities in China: An evaluation of alternative policies," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 189-198, June.
  54. Fan, Shenggen & Zhang, Xiaobo, 2004. "Infrastructure and regional economic development in rural China," China Economic Review, Elsevier, vol. 15(2), pages 203-214.
  55. Lining He & Faye Duchin, 2007. "Regional Development in China: Interregional Transportation Infrastructure and Regional Comparative Advantage," Rensselaer Working Papers in Economics 0705, Rensselaer Polytechnic Institute, Department of Economics.
  56. Shujie Yao, 2006. "On economic growth, FDI and exports in China," Applied Economics, Taylor & Francis Journals, vol. 38(3), pages 339-351.
  57. LAU, Chi Keung Marco, 2010. "New evidence about regional income divergence in China," China Economic Review, Elsevier, vol. 21(2), pages 293-309, June.
  58. Tsui, Kai-yuen, 1996. "Economic reform and interprovincial inequalities in China," Journal of Development Economics, Elsevier, vol. 50(2), pages 353-368, August.
  59. Xiaowen Tian, 1999. "Market Orientation and Regional Economic Disparities in China," Post-Communist Economies, Taylor & Francis Journals, vol. 11(2), pages 161-172.
  60. Marie-Claire Robitaille & Ishita Chatterjee, 2013. "Mother-In-Law and Son Preference in India," Economics Discussion / Working Papers 13-04, The University of Western Australia, Department of Economics.
  61. Kailei Wei & Shujie Yao & Aying Liu, 2009. "Foreign Direct Investment and Regional Inequality in China," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 778-791, November.
  62. Edwards, Sebastian, 1993. "Openness, Trade Liberalization, and Growth in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 31(3), pages 1358-93, September.
  63. Arne Melchior, 2010. "Globalisation and the provinces of China: the role of domestic versus international trade integration," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 8(3), pages 227-252.
  64. Wei Zou & Ziyin Zhuang & Hao Zhou & Hairong Song, 2008. "Measuring divergence in provincial growth in China: 1981-2004," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 11(3), pages 215-227.
  65. Wei Zou & Ziyin Zhuang & Hao Zhou & Hairong Song, 2008. "Measuring divergence in provincial growth in China: 1981-2004," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 11(3), pages 215-227.
  66. Pan-Long Tsai, 1995. "Foreign direct investment and income inequality: Further evidence," World Development, Elsevier, vol. 23(3), pages 469-483, March.
  67. Yang, Dennis Tao, 2002. "What has caused regional inequality in China?," China Economic Review, Elsevier, vol. 13(4), pages 331-334, December.
  68. Hai Fang & John Rizzo, 2011. "Income inequality dynamics in rural China from 1991 to 2006: the role of alternative income sources," Applied Economics Letters, Taylor & Francis Journals, vol. 18(14), pages 1307-1310.
  69. Dapeng Hu & Masahisa Fujita, 2001. "Regional disparity in China 1985-1994: The effects of globalization and economic liberalization," The Annals of Regional Science, Springer, vol. 35(1), pages 3-37.
  70. Martin, Philippe & Rogers, Carol Ann, 1995. "Industrial location and public infrastructure," Journal of International Economics, Elsevier, vol. 39(3-4), pages 335-351, November.
  71. Basu, Parantap & Guariglia, Alessandra, 2007. "Foreign Direct Investment, inequality, and growth," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 824-839, December.
  72. Ziliak, James P, 1997. "Efficient Estimation with Panel Data When Instruments Are Predetermined: An Empirical Comparison of Moment-Condition Estimators," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(4), pages 419-31, October.
  73. GOH, Chor-ching & LUO, Xubei & ZHU, Nong, 2009. "Income growth, inequality and poverty reduction: A case study of eight provinces in China," China Economic Review, Elsevier, vol. 20(3), pages 485-496, September.
  74. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:uwa:wpaper:13-10. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shane Standley)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.