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Globalization and Regional Income Inequality--Evidence from within China

Author

Listed:
  • Guanghua Wan

    (UNU-WIDER, Helsinki, Finland)

  • Ming Lu

    (Employment & Social Security Research Center, & China Center for Economic Studies, Fudan University)

  • Zhao Chen

    (China Center for Economic Studies, Fudan University)

Abstract

China¡¯s recent accession to the WTO is expected to accelerate its integration into the world economy, which aggravates concerns over the impact of globalization on the already rising inter-region income inequality in China. This paper discusses China¡¯s globalization process and estimates an income generating function, incorporating trade and FDI variables. It then applies the newly developed Shapley value decomposition technique to quantify the contributions of globalization, along with other variables, to regional inequality. It is found that (a) globalization constitutes a positive and substantial share to regional inequality and the share rises over time; (b) capital is one of the largest and increasingly important contributor to regional inequality; (c) economic reform characterized by privatization exerts a significant impact on regional inequality; and (d) the relative contributions of education, location, urbanization and dependency ratio to regional inequality have been declining.

Suggested Citation

  • Guanghua Wan & Ming Lu & Zhao Chen, 2005. "Globalization and Regional Income Inequality--Evidence from within China," Econometrics 0511014, EconWPA.
  • Handle: RePEc:wpa:wuwpem:0511014
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Yin Zhang & Guanghua Wan, 2006. "Globalization and the Urban Poor in China," Dundee Discussion Papers in Economics 196, Economic Studies, University of Dundee.
    2. Zhang, Xiaobo, 2006. "Fiscal decentralization and political centralization in China: Implications for growth and inequality," Journal of Comparative Economics, Elsevier, vol. 34(4), pages 713-726, December.
    3. Wan, Guanghua & Lu, Ming & Chen, Zhao, 2006. "The inequality-growth nexus in the short and long run: Empirical evidence from China," Journal of Comparative Economics, Elsevier, vol. 34(4), pages 654-667, December.
    4. Binjian, Binjian & Sakamoto, Hiroshi, 2013. "Market Reform and Income Distribution in China : A CGE–Microsimulation Approach," AGI Working Paper Series 2013-13, Asian Growth Research Institute.
    5. Zhao Chen & Yu Jin & Ming Lu, 2005. "Economic Opening and Industrial agglomeration in China," Industrial Organization 0511012, EconWPA.
    6. Kris James Mitchener & Se Yan, 2010. "Globalization, Trade & Wages: What Does History tell us about China?," NBER Working Papers 15679, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C4 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs

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