Human Capital Agglomeration Effect and Regional Disparity in China

Zhiwei Cen (), Yoshimasa Aoki () and Junko Doi ()
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Zhiwei Cen: Kyoto Sangyo University
Yoshimasa Aoki: Ritsumeiken University
Junko Doi: Kanasi University

Chapter Chapter 7 in Growth Mechanisms and Sustainable Development of the Chinese Economy, 2022, pp 185-226 from Springer

Abstract: Abstract This chapter uses Barro regression to test the hypothesis that human capital agglomeration affects China‘s interregional income inequality from 1991 to 2004. The analysis in this chapter shows that, first, absolute βconvergence was not significantly measured during the 1991–2004 estimation period. Second, when the human capital agglomeration effect is considered, conditional convergence and the estimated values of the coefficients of foreign investment and trade effects on regional economic development are also significant. These results indicate that in coastal regions where workers with high levels of human capital are concentrated, both production activities and trade by foreign capital are promoted, resulting in increased economic growth rates. However, the outflow of workers with high levels of human capital resulted in lower economic growth rates. As a result, we can conclude that the period’s human capital agglomeration effect increases the income inequality between regions.

Keywords: Human capital; Agglomeration effect; Absolute convergence; Conditional convergence (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-981-19-3858-0_7

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DOI: 10.1007/978-981-19-3858-0_7

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