Dissertation > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods

The Empirical Analysis on the Trends of the Income Differences among Chinese Provinces and Its Cause

Author ZhangJian
Tutor ShiZhuXian
School Jilin University
Course Quantitative Economics
Keywords regional income differences the test of convergence or divergence panel data unit root panel data cointegretion
CLC F224
Type PhD thesis
Year 2008
Downloads 790
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In recent years, a new interest in the theoretical aspects of growth theory has been coupled with empirical investigation of whether poor economies eventually attain the standard of living of rich economies. Indeed, most of the research lack of convergence, it has motivated several new endogenous growth models, including those of Romer (1986), Lucas (1988), and Rebelo (1991). In the standard neoclassical growth models of Solow (1956) and Cass (1965), economies that experience diminishing scal returns to input factors of production and that have eventual access to technical knowledge converge to parallel balanced growth paths. The growth rate of output per worker along each of these balanced growth paths equals the rate at which technical knowledge advances, but its level may differ across economies by constant proportional amounts. However, if the technologies, preferences, market structures, institutions, government policies, and all other relevant characteristics of these economies are identical, the balanced growth paths coincide so that output per worker is identical across the economies. By contrast, if the economies experience constant scal returns to input factors of production or if access to technical knowledge differs systematically across countries, their growth paths do not converge in a stochastic world.Since reform and opening up, China’s rapid economic development, the regional economic development has improved continuously. However, due to China’s vast territory and varied natural conditions, regional economic development model may be different, in different areas of natural resources, regional characteristics, economic base, technical strength, market position and the information there is a big difference, coupled with our long-standing The planned economic system caused the economic structure, the irrational distribution of productive forces has led to the imbalance in regional economic development. Promoting coordinated regional development, gradually narrow the development gap between regions is deeply implement the scientific concept of development, building a well-off society of the major strategic task. Reform and opening up nearly 30 years later, was envisaged in the coastal areas to inland from the ladder of development chain form, the so-called "flying geese" development model has not yet fully formed. In addition, the widening economic gap between the backgrounds, people on social stability has deepened the worries. To this end, China began make great efforts to develop inland areas, especially in the western region, making the "Western Development" policy. 2001 start of the 10 five-year plan, the government will "western development" as the focus of work and financial capital and other areas in the western region has tilted. Began in 2003 and made the revitalization of old industrial bases in northeast China’s strategic approach to development.As China’s national economy sustained and rapid development, regional economic development imbalances have not been eased, but a closer exacerbated the trend. This long-term if not alleviated, as its expansion, the entire national economy will be adversely affected, from a political perspective, as more developed regions for ethnic minority areas is not conducive to national unity from the economic perspective, this Kind of imbalance will control the entire national economy coordination, rapid, stable and healthy development. Therefore, correctly understand and measure the level of regional economic development trend of changes and their impact factors, and its comprehensive evaluation, we can examine the implementation of national policies, but will also further promote the economic development of comprehensive and coordinated development of the macroeconomic policies of reference Basis.Based on the performance after the founding of New China after the region was a huge gap between per capita income and the sustainability of the gap, followed by the theory, to empirical testing, and to analyze the reasons for the rigorous logic of ideas, the income gap in China conducted a comparison in-depth study. Using fixed effects panel data regression method,σmethods and panel unit root of China’s inter-provincial income convergence of the empirical testing. Using analysis of variance methods to China’s reform and opening up regional economic growth model has been tested. Use non-parametric methods measure the productivity of our various regions and to break it down, to study China’s regional income gap reasons. With the introduction of international trade knowledge spillover effect, a production function, and the use of panel unit root test and panel cointegration test methods and analysis of the regional income gap causes.There are seven chapters in this thesis as follows:In chapter 1, This chapter raised this issue and the background to the study, elaborated on China’s regional income gap between the trend and causes of theoretical and practical significance, on the past economic growth at home and abroad in the field of regional income convergence, divergence of existing empirical research results have to sort out, including income convergence of the test method, resulting in a specific region within the framework of income convergence or divergence of the reasons for such areas, in order to clear the income gap between regions on the latest developments, then clearly the focus of this research and innovation.The chapter 2 describes China’s regional differences in economic development and characteristics. This chapter focuses on China’s economic development strategy and the level of regional economic development situation as a whole and regional overview, creating a situation of China’s economic development and the level of development of intuitive understanding. Use of graphs, charts and some descriptive statistical tools on behalf of China’s regional economic disparities describe various aspects, since the founding of New China and it’s demonstrated by the changes in the characteristics and trend analysis.In chapter 3, introduce the income convergence and income divergence theoretical research. The purpose of this chapter in the revenue is introducing convergence, divergence basis of the theory. First of all, introduced the Solow neoclassical growth theory and model, from the model assumptions to experience the conclusion of the neo-classical growth theory lead to convergence of the reasons for income as the new classical growth theory will be the long-term growth rate of per capita output reduced to the level of technology growth, and growth was regarded as exogenous technical change, and this theory can not explain the difference between long-term growth, but can be different between countries convergence income tends to this conclusion. Secondly, on endogenous growth theory of creation, development context, the basic thinking on content and research and development model and the human capital model two main model of endogenous growth theory, lead to economic income of the reasons for the divergence, endogenous succession of the new growth theory, classical growth theory, a decision on the technical progress of the long-term economic growth rate assumptions, the difference is that the endogenous growth theory is the assumption that technological progress by the economic system is endogenous, and as a result the economy may have between different skill levels and growth of technology, and the resulting different long-term economic growth, thereby benefit from the income countries tend to divergent conclusions.Chapter 4 is the test of China’s inter-provincial income convergence. This chapter from the income test for convergence of the experience derived start. At first, for the last 20 years has been the convergence of the income test of the methods were summarized and concluded. Secondly, compare the data types, the economic theory and the method of the income test convergence, divergence of applicability, particularly in the affirmative and analysis of how to use the panel unit root test in testing convergence. Third, the use of fixed effects panel data regression method,σmethods and means panel unit root in China from 1952 to 2004 in 27 provinces, municipalities and autonomous regions of the income convergence of the empirical testing and empirical analysis. Inspection from 1952 to 2004 in China at all data, obtained from 1952 to 2004 in China’s provinces do not have the income convergence phenomenon, the conclusion of the neo-classical growth theory, the income convergence hypothesis in China does not effect. If the time to consider, from 1952 to 1978 in China’s provinces between income convergence phenomenon, and the period from 1978 to 2004, China’s provinces of income between the convergence phenomenon does not exist.In chapter 5, analyze and test the causes of our income gaps. This chapter based on growth accounting theory, in the literature review on the basis of study of the gap between China’s provincial factors (physical capital, labor and TFP), and test input element accumulation or TFP is the impact of the income gap in China. Explore the regional economic growth in our country in the process of extensive and intensive nature, use the production function method to estimated China’s input elements of the income elasticity, and use the analysis of variance methods to test China’s reform and opening up regional economic growth pattern. The results show that from 1978 to 2004 China’s regional economic growth pattern emerged from extensive to intensive-changing characteristics, the use of growth theory, and the production function decomposition of the provinces in China that caused the divergence between incomes was mainly due to the intensive factors.In chapter 6, measure the productivity of China’s provinces, and the decomposition of the productivity, analysis the productivity on the income gap between China’s regional influences. After the empirical analysis of chapter 5, it shows that the inter-regional differences in the productivity are the main reason for China’s regional income gap. This chapter first to use data envelopment analysis of the calculation method of the sub-region and its Malmquist productivity index had decomposition, abtain the technical efficiency and technological progress. Secondly, the use of static analysis of panel data model of technological progress and technical efficiency of regional differences in the impact of income divergence. Third, explore and test the impact of China’s regional technical efficiency and technological progress. The results showed that all regions of our technological advances contribute the most share of TFP growth, that is to say, China’s differences in regional technological advancement are the main factor of income disparities. China’s import and use of FDI generated by the spread of technology that is significantly existence, and they bring knowledge spillover effect to promote technological progress in China.In chapter 7, in the aforesaid endogenous growth model, the rate of technological progress that different income levels will lead to economic divergence, through chapter 6 of decomposition and productivity analysis shows that China’s technological advancement of the regional differences that are the main factor of income disparities. And the most significant technological progress is the result of the change in comparative advantage. This chapter provides an overview of the evolution of trade liberalization, based on the mechanisms of international trade in the region income gap, introduce the trade spillover effect with the production function mathematical model, using the production function and panel cointegration on the empirical testing in China’s regional income differences. The results show that China’s international trade in the regional technology spillover effect is significant, according to the explain of the growth theory, the technology is the main driving force sustained economic growth, the differences in trade spillover effect are the most fundamental reason of regional income divergence.

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