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Regional convergence or divergence in China? Evidence from unit root tests with breaks

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  • Pei-Chien Lin
  • Chun-Hung Lin
  • I-Ling Ho

Abstract

The validity of regional economic clubs requires that two conditions be met. First, per capita output between clubs diverges so that the poor region can hardly catch up with the rich one. Second, per capita outputs within each club converge to similar steady states. This paper applies unit root tests with endogenously determined structural breaks to demonstrate the existence of regional economic clubs among the Chinese provinces, based on a panel data set of real per capita GDP for 28 provincial units in China from 1953 to 2007. Our results show that regional economic clubs do exist in the Chinese case, thus reflecting the problem of regional growth divergence in China’s economic development. Copyright Springer-Verlag 2013

Suggested Citation

  • Pei-Chien Lin & Chun-Hung Lin & I-Ling Ho, 2013. "Regional convergence or divergence in China? Evidence from unit root tests with breaks," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 50(1), pages 223-243, February.
    • Handle: RePEc:spr:anresc:v:50:y:2013:i:1:p:223-243
    DOI: 10.1007/s00168-011-0490-0
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    2. Anping Chen & Nicolaas Groenewold, 2017. "An increase in the retirement age in China: the regional economic effects," Applied Economics, Taylor & Francis Journals, vol. 49(7), pages 702-721, February.
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    More about this item

    Keywords

    O53; R11; C22; C23;
    All these keywords.

    JEL classification:

    • 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
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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