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Regional convergence clubs in China: identification and conditioning factors

Weili Zhang (20101211@huel.edu.cn), Wei Xu (wei.xu@uleth.ca) and Xiaoye Wang (363793128@qq.com)
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Weili Zhang: Henan University of Economics and Law
Wei Xu: University of Lethbridge
Xiaoye Wang: Henan University of Economics and Law

The Annals of Regional Science, 2019, vol. 62, issue 2, No 5, 327-350

Abstract: Abstract This paper investigates club convergence in income per capita of 329 prefecture-level city regions in China over a period of 1990 to 2014. A nonlinear time-varying factor model is adopted to examine convergence trends as the model allows for transitional heterogeneity and divergence from the actual growth path. The study further explores the driving forces of convergence clubs using an ordered response model. Four convergence clubs are identified, showing no geographic regularity in club member locations. The highest income club and the lowest income club tend to converge strongly, whereas two middle-income clubs converge weakly. The findings indicate that initial conditions, sectorial characteristics, preferential development policy, general government spending, network effect, spatial effect, and the role of globalization are the significant factors responsible for the formation of club convergence in China.

JEL-codes: C23 O47 R11 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (18)

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DOI: 10.1007/s00168-019-00898-y

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