Spatial Externalities and Regional Income Inequality: Evidence from China’s Prefecture- Level Data

Xiuyan Liu () and Xingmin Yin ()
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Xiuyan Liu: School of Economics & Management, Southeast University, Nanjing 210096, China
Xingmin Yin: School of Economics & Management, Southeast University, Nanjing 210096, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2010, vol. 5, issue 2, 325-338

Abstract: Based on panel data of 282 prefectures in China from 1999 to 2004; we explore the relationship between market potential, employment density and per capita GDP by using a dynamic panel data approach. It is found that the externalities arising from market potential and employment density have a positive and significant effect on local income. Moreover, both absolute and standardized elasticity of market potential externalities are pronounced, which suggests that market potential has a greater impact on regional disparity.

Keywords: spatial externalities; income inequality; market potential; dynamic panel (search for similar items in EconPapers)
JEL-codes: L69 O14 (search for similar items in EconPapers)
Date: 2010
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