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Measuring divergence in provincial growth in China: 1981–2004

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  • Wei Zou
  • Ziyin Zhuang
  • Hao Zhou
  • Hairong Song

Abstract

Provincial income disparity in China has been increasing with rapid economic growth, yet the measurement of the causes of the divergence is relatively inadequate. Based on growth regression analysis and “counterfactual econometrics”, this paper constructs “counterfactual” relative per capita income with consideration of several factors such as initial income level, physical capital, employment, human capital, infrastructure, degree of openness and urbanization. We then measure different factors’ contribution to β‐convergence and the σ‐convergence across provinces. We find out that while contributing significantly to economic growth, different infrastructure, human capital and urbanization rates also result in provincial divergence.

Suggested Citation

  • 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.
    • Handle: RePEc:taf:jecprf:v:11:y:2008:i:3:p:215-227
    DOI: 10.1080/17487870802417727
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    References listed on IDEAS

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    1. Leone Leonida & Leone Leonida & Daniel Montolio, 2003. "Public Capital, Growth and Convergence in Spain. A Counterfactual Density Estimation Approach," Working Papers 2003/3, Institut d'Economia de Barcelona (IEB).
    2. Peter Wilson & Henry Ng Shang Ren, 2006. "Managing Exchange Rate Volatility: A Comparative Counterfactual Analysis of Singapore 1994 to 2003," SCAPE Policy Research Working Paper Series 0608, National University of Singapore, Department of Economics, SCAPE.
    3. Bennett T. McCallum, 2000. "Alternative monetary policy rules : a comparison with historical settings for the United States, the United Kingdom, and Japan," Economic Quarterly, Federal Reserve Bank of Richmond, issue Win, pages 49-79.
    4. Peter Wilson & Henry Ng Shang Ren, 2006. "Managing Exchange Rate Volatility : A Comparative Counterfactual Analysis Of Singapore 1994 To 2003," Macroeconomics Working Papers 22584, East Asian Bureau of Economic Research.
    5. Leone Leonida & Leone Leonida & Daniel Montolio, 2003. "Public Capital, Growth and Convergence in Spain. A Counterfactual Density Estimation Approach," Working Papers 2003/3, Institut d'Economia de Barcelona (IEB).
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    Cited by:

    1. Pääkkönen, Jenni, 2009. "Are there industrial and agricultural convergence clubs in China?," BOFIT Discussion Papers 15/2009, Bank of Finland Institute for Emerging Economies (BOFIT).
    2. Jenni Pääkkönen, 2012. "Are there industrial and agricultural convergence clubs in China?," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 10(1), pages 1-13, June.
    3. Cheong, Tsun Se & Wu, Yanrui, 2013. "Regional disparity, transitional dynamics and convergence in China," Journal of Asian Economics, Elsevier, vol. 29(C), pages 1-14.
    4. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.

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