The Effects of Intraregional Disparities on Regional Development in China: Inequality Decomposition and Panel-Data Analysis

Reuter and Ulrich

No 716, Econometric Society 2004 Far Eastern Meetings from Econometric Society

Abstract: This paper analyzes the development and effects of intra-provincial regional disparities in China between 1989 and 2001. A decomposition analysis shows that intraprovincial disparities contribute significantly to total regional inequality. In the second part of the paper, the impact of the observed intraprovincial disparities on regional economic development is addressed. Using provincial panel data on industrial growth, capital and employment, the impact of inequality on industrial growth is estimated as affecting technical efficiency and level of technology. The results show a significant positive effect of intra-provincial disparities on provincial industrial growth, with causality from inequality to growth. Moreover, it appears that the inequality-growth relationship is not a linear one, but rather that the impact of extreme changes in inequality is stronger and more significant than a moderate increase in inequality. These outcomes are robust to alternative model specifications and control variabl

Keywords: Inequality; Decomposition; Growth; Panel Data; China (search for similar items in EconPapers)
JEL-codes: O15 O53 R11 (search for similar items in EconPapers)
Date: 2004-08-11
New Economics Papers: this item is included in nep-dev and nep-geo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ecm:feam04:716

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