IDEAS home Printed from https://ideas.repec.org/a/taf/regstd/v44y2010i9p1171-1187.html
   My bibliography  Save this article

Development of Financial Intermediation and the Dynamics of Urban-Rural Disparity in China, 1978-1998

Author

Listed:
  • Yiu Por Chen
  • Mingxing Liu
  • Qi Zhang

Abstract

Chen Y. P., Liu M. and Zhang Q. Development of financial intermediation and the dynamics of urban-rural disparity in China, 1978-1998, Regional Studies. This paper focuses on the impacts of financial intermediation development on the urban-rural income disparity (URID) in China. Using a twenty-year province-level panel data set from 1978 to 1998, it is found that the change of URID may be explained by fiscal policy during the early reform period (1978-1989) and financial intermediates during the later reform period (1990-1998). In addition, it is shown that the direction the Kuznets effect, an inverted 'U'-shaped relationship between per-capita gross domestic product and URID, is sensitive to changes in government development policies. This study adds to the spatial economic inequality literature by clarifying the effects of urban-biased financial intermediation policy on the underlying dynamics of convergent and divergent effects on urban-rural inequality. [image omitted] Chen Y. P., Liu M. et Zhang Q. Le developpement de l'intermediation financiere et la dynamique des ecarts des revenus urbano-ruraux en Chine entre 1978 et 1998, Regional Studies. Cet article porte sur l'impact du developpement de l'intermediation financiere sur l'URID (Urban-Rural Income Disparity - les ecarts des revenus urbano-ruraux) en Chine. A partir d'une enquete a echantillon constant aupres des provinces et conduite sur une periode de vingt annees, a savoir de 1978 jusqu'a 1998, il s'avere que le changement de l'URID pourrait s'expliquer par la politique fiscale menee pendant la premiere periode de reforme (entre 1978 et 1989) et par les intermediaires financiers pendant la derniere periode de reforme (entre 1990 et 1998). Qui plus est, on montre que le chemin de l'effet Kuznets, un rapport en forme de U renversee entre le PIB par tete et l'URID, est sensible aux modifications de la politique de developpement du gouvernement. Cette etude cherche a contribuer a la documentation au sujet des inegalites economiques geographiques en eclaircissant l'impact des politiques en faveur du developpement de l'intermediation financiere au niveau urbain sur la dynamique sous-jacente des effets de convergence et de divergence sur l'inegalite urbano-rurale. Intermediaires financiers Inegalite urbano-rurale Effet Kuznets Politique de developpement Chine Chen Y. P., Liu M. und Zhang Q. Entwicklung eines Finanzausgleichs und Dynamik der Disparitat der Einkommen in Stadt und Land in China, 1978-1998, Regional Studies. Im Mittelpunkt dieses Beitrags stehen die Auswirkungen der Entwicklung eines Finanzausgleichs auf die Disparitat der Einkommen in Stadt und Land in China. Anhand eines 20-jahrigen Datensatzes auf Provinzebene fur den Zeitraum von 1978 bis 1998 stellen wir fest, dass sich die Veranderungen in der Disparitat der Einkommen in Stadt und Land wahrend der fruhen Reformperiode (1978-1989) durch die Fiskalpolitik und wahrend der spateren Reformperiode (1990-1998) durch Finanzausgleiche erklaren lassen. Daruber hinaus weisen wir nach, dass die Richtung des Kuznets-Effekts - des Verhaltnisses zwischen dem Pro-Kopf-BIP und der Disparitat der Einkommen in Stadt und Land in Form eines umgekehrten U - auf Anderungen in der staatlichen Entwicklungspolitik reagiert. Als Beitrag zur Literatur uber raumliche wirtschaftliche Ungleichheit werden in dieser Studie die Auswirkungen einer einseitig urban gewichteten Finanzausgleichspolitik auf die zugrundeliegende Dynamik der konvergenten und divergenten Auswirkungen auf die Ungleichheit von Stadt und Land geklart. Finanzausgleich Ungleichheit von Stadt und Land Kuznets-Effekt Entwicklungspolitik China Chen Y. P., Liu M. y Zhang Q. Desarrollo de la intermediacion financiera y las dinamicas de la desigualdad urbana-rural en China, 1978-1998, Regional Studies. El tema central de este articulo son las repercusiones del desarrollo de intermediacion financiera en la desigualdad de ingresos urbanos-rurales en China. Usando un grupo de datos de panel a nivel de provincias durante un periodo de 20 anos, 1978-1998, observamos que el cambio en la desigualdad de ingresos urbanos-rurales podria explicarse por la politica fiscal durante el periodo inicial de reformas (1978-1989) y los intermedarios financieros durante el periodo posterior de reformas (1990-1998). Ademas, mostramos que la direccion del efecto Kuznets, una relacion en forma de U invertida entre el PIB per-capita y la desigualdad de ingresos urbanos-rurales, es sensible a cambios en las politicas gubernamentales de desarrollo. Como aportacion a la literatura sobre desigualdades economicas y espaciales, en este estudio describimos los efectos de la politica de intermediacion financiera con sesgo urbano en cuanto a las dinamicas subyacentes de los efectos convergentes y divergentes de las desigualdades urbana-rurales. Intermediacion financiera Desigualdad urbana-rural Efecto Kuznets Politica de desarrollo China

Suggested Citation

  • 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.
    • Handle: RePEc:taf:regstd:v:44:y:2010:i:9:p:1171-1187
    DOI: 10.1080/00343400903365052
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00343400903365052
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00343400903365052?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Clarke, George & Xu, Lixin Colin & Zou, Heng-fu, 2003. "Finance and income inequality : test of alternative theories," Policy Research Working Paper Series 2984, The World Bank.
    2. Yasheng Huang, 2005. "Symposium on 'Selling China: Foreign Direct Investment during the Reform Era' - Huang's Response," Management and Organization Review, International Association of Chinese Management Research, vol. 1(2), pages 329-333, July.
    3. Beck, Thorsten & Demirguc-Kunt, Asli & Levine, Ross & Maksimovic, Vojislav, 2000. "Financial structure and economic development - firm, industry, and country evidence," Policy Research Working Paper Series 2423, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Abdul Samad Abdul-Rahim & Chenglong Sun & A. W. Noraida, 2018. "The Impact of Soil and Water Conservation on Agricultural Economic Growth and Rural Poverty Reduction in China," Sustainability, MDPI, vol. 10(12), pages 1-12, November.
    2. Wang, Xiang & Shao, Shuai & Li, Ling, 2019. "Agricultural inputs, urbanization, and urban-rural income disparity: Evidence from China," China Economic Review, Elsevier, vol. 55(C), pages 67-84.
    3. Yong Liu & Cuihong Long, 2021. "Urban and Rural Income Gap: Does Urban Spatial Form Matter in China?," SAGE Open, , vol. 11(1), pages 21582440211, March.
    4. Li, Mengxu & Liu, Jianghua & Chen, Yang & Yang, Zhijiu, 2023. "Can sustainable development strategy reduce income inequality in resource-based regions? A natural resource dependence perspective," Resources Policy, Elsevier, vol. 81(C).
    5. Deng Chen & Yanxia Wang & Fu Ren & Qingyun Du, 2016. "Spatio-Temporal Differentiation of Urban-Rural Equalized Development at the County Level in Chengdu," Sustainability, MDPI, vol. 8(5), pages 1-17, April.
    6. Hao, Yunping & Zhang, Bing, 2024. "The impact of digital financial usage on resident’s income inequality in China: An empirical analysis based on CHFS data," Journal of Asian Economics, Elsevier, vol. 91(C).
    7. Tsun Se Cheong & Yanrui Wu, 2013. "Globalization and Regional Inequality," Economics Discussion / Working Papers 13-10, The University of Western Australia, Department of Economics.
    8. MA Xinxin & KOMATSU Sho, 2023. "Impact of E-commerce Development on Income Inequality: Evidence from rural China based on cross-county panel data," Discussion papers 23044, Research Institute of Economy, Trade and Industry (RIETI).
    9. Sheng Zhang & Ge Li & Ran Yu & Yuanhua Chang & Yifu Yang & Qihao Zhang & Weining Liu & Jiming Hao, 2024. "Understanding the shortboard of regional sustainable development: fairness and efficiency of rural public resource allocation in China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(7), pages 16739-16756, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Levine, Ross, 2005. "Finance and Growth: Theory and Evidence," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 12, pages 865-934, Elsevier.
    2. Yiu Por Chen & Mingxing Liu & Qi Zhang, 2006. "Development of Financial Intermediation and the Dynamics of Rural-Urban Inequality: China, 1978-98," WIDER Working Paper Series RP2006-65, World Institute for Development Economic Research (UNU-WIDER).
    3. Jung, Samuel Moon & Vijverberg, Chu-Ping C., 2019. "Financial development and income inequality in China – A spatial data analysis," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 295-320.
    4. Abu N. M. Wahid & Muhammad Shahbaz & Pervaz Azim, 2011. "Inflation and Financial Sector Correlation: The Case of Bangladesh," International Journal of Economics and Financial Issues, Econjournals, vol. 1(4), pages 145-152.
    5. Fase, M. M. G. & Abma, R. C. N., 2003. "Financial environment and economic growth in selected Asian countries," Journal of Asian Economics, Elsevier, vol. 14(1), pages 11-21, February.
    6. Aisha Tauqir & Muhammad Tariq Majeed & Sadaf Kashif, 2022. "Foreign Direct Investment and Output Volatility Nexus: A Global Analysis," Foreign Trade Review, , vol. 57(3), pages 283-309, August.
    7. Giuseppe Bertola & Anna Lo Prete, 2009. "Openness, Financial Markets and Policies: Cross-Country and Dynamic Patterns," Annals of Economics and Statistics, GENES, issue 95-96, pages 167-182.
    8. Li, Mengxu & Liu, Jianghua & Chen, Yang & Yang, Zhijiu, 2023. "Can sustainable development strategy reduce income inequality in resource-based regions? A natural resource dependence perspective," Resources Policy, Elsevier, vol. 81(C).
    9. Olena Oliynyk & Viktor Adamenko & Ludmila Oliynyk, 2015. "The Comparative Analysis of Financial System of Czech Republic, Poland and Ukraine," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 63(6), pages 2067-2076.
    10. Gazi Salah Uddin & Phouphet Kyophilavong & Nasim Sydee, 2012. "The Casual Nexus of Banking Sector Development and Poverty Reduction in Bangladesh," International Journal of Economics and Financial Issues, Econjournals, vol. 2(3), pages 304-311.
    11. Alessandra Bonfiglioli, 2004. "Equities and Inequality," 2004 Meeting Papers 256, Society for Economic Dynamics.
    12. Manthos D. Delis & Iftekhar Hasan & Pantelis Kazakis, 2014. "Bank Regulations and Income Inequality: Empirical Evidence," Review of Finance, European Finance Association, vol. 18(5), pages 1811-1846.
    13. Zhicheng Liang, 2006. "Financial Development And Income Distribution: A System Gmm Panel Analysis With Application To Urban China," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 31(2), pages 1-21, December.
    14. Ekundayo P. Mesagan & Isaac A. Ogbuji & Yasiru O. Alimi & Anthonia T. Odeleye, 2019. "Growth Effects of Financial Market Instruments: The Ghanaian Experience," Working Papers 19/095, European Xtramile Centre of African Studies (EXCAS).
    15. Erasmus L. Owusu & Nicholas M. Odhiambo, 2015. "Financial Sector Reforms and Economic Growth in Ghana: a Dynamic ARDL Model," Contemporary Economics, University of Economics and Human Sciences in Warsaw., vol. 9(2), June.
    16. Zhicheng Liang, 2006. "Financial Development and Income Inequality in Rural China 1991-2000," WIDER Working Paper Series RP2006-96, World Institute for Development Economic Research (UNU-WIDER).
    17. Junqin Huang & Youliang Liao & Bin Lin & Lawrence Loh, 2022. "Supporter or Supervisor? The Role of Chief Financial Officers in Corporate Innovation," Sustainability, MDPI, vol. 14(15), pages 1-18, August.
    18. Dwiputri, Inayati Nuraini & Arsyad, Lincolin & Pradiptyo, Rimawan, 2018. "The corruption-income inequality trap: A study of Asian countries," Economics Discussion Papers 2018-81, Kiel Institute for the World Economy (IfW Kiel).
    19. Erasmus L Owusu, 2016. "Stock Market and Sustainable Economic Growth in Nigeria," Economies, MDPI, vol. 4(4), pages 1-13, November.
    20. Appiah-Otoo, Isaac & Chen, Xudong & Ampah, Jeffrey Dankwa, 2023. "Does financial structure affect renewable energy consumption? Evidence from G20 countries," Energy, Elsevier, vol. 272(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:regstd:v:44:y:2010:i:9:p:1171-1187. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/CRES20 .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.