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Cumulative causation and inequality among villages in China

John Knight and Shi Li ()

Oxford Development Studies, 1997, vol. 25, issue 2, 149-172

Abstract: Why are villages that are geographically so close together economically so far apart? This question is examined using a survey of 1000 households in seven villages in Hebei province, China. An answer is developed in terms of factor immobility and processes of cumulative causation. Although a good natural resource endowment helps to initiate the process, the main cause of differential village development is non-farm sources of income: migration and village industry. Both are constrained and the easing of the constraints involves path-dependent cumulative processes. For instance, migration requires a village network of information and contacts, and village industrialization depends on the accumulation of local skills through a process of learning-by-doing and on the reinvestment of profits. There is a case for mesoeconomic analysis at the village level in China and in other poor countries.

Date: 1997
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Citations: View citations in EconPapers (15)

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Working Paper: Cumulative Causation and Inequality Among Villages in China (1996)
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DOI: 10.1080/13600819708424127

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