How does the urban–rural income gap affect the quality of China’s economic growth?

Baoping Ren and Xiaojing Chao

China Political Economy, 2018, vol. 1, issue 1, 136-148

Abstract: Purpose - Based on the theoretical definition of the quality of economic growth as well as the availability and reliability of the given data, the purpose of this paper is to build an evaluation system of a regional economic growth quality on three levels: conditions, processes and results. Design/methodology/approach - From the perspective of economic quality, this paper offers a theoretical interpretation on how the urban–rural income gap affects the quality of economic growth and takes an empirical test on the sample panel data from 30 provinces and regions through difference GMM and system GMM models. Findings - The results show that the excessively large income gap will influence economic growth in terms of the foundation, operation and the outcome, thereby, restricting the quality of economic growth. In addition, investments in human and physical capital and improvements in terms of transport infrastructure, industrial structure and economic openness play an active role in economic growth quality, whereas government expenditure scale, financial development and the deviation of industrial structure have a negative effect. Originality/value - There has been a substantial amount of experience and evidence on the research about the issue of China’s income distribution and the quantity of economic growth, whereas there are relatively fewer discussions about the income distribution and the quality of economic growth. This paper, based on what has been mentioned above, tries to give a theoretical interpretation and an empirical test to describe the relationship between urban–rural income gap and the quality of economic growth from the quality point of view.

Keywords: Urban–rural income gap; Human capital investment; Quality of economic growth (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eme:cpepps:cpe-09-2018-005

DOI: 10.1108/CPE-09-2018-005

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