The coastal-inland income gap in China from 1991 to 1999: the role of geography and policy

Wang, Z. and O'Brien, R. (2003) The coastal-inland income gap in China from 1991 to 1999: the role of geography and policy. Southampton, University of Southampton (Discussion Papers in Economics and Econometrics 0301).


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We investigate the enlarging coastal-inland income gap in China during the 1990s, using GMM estimation of a Solow growth model. Disaggregating capital investment by source: public, foreign and private: helps to disentangle the effect of policy from those of geography. The impact of public investment on growth is insignificant in our panel data for 29 provinces; that of foreign investment is significant; private investment is most influential. We also use the distance by railway of each province’s capital city to its nearest port city as a proxy for transportation costs, and find significant differences across regions. Distance has negative effects on economic development but its marginal impact effects become less as distance increases. The coastal-inland gap will grow in the foreseeable future, if inland areas are not able to benefit from an increase in private investment and infrastructure improvements (to reduce transport costs).

Item Type: Monograph (Discussion Paper)
ISSNs: 0966-4246 (print)
Related URLs:
Subjects: H Social Sciences > HC Economic History and Conditions
Divisions : University Structure - Pre August 2011 > School of Social Sciences > Economics
ePrint ID: 33201
Accepted Date and Publication Date:
2003Made publicly available
Date Deposited: 18 May 2006
Last Modified: 31 Mar 2016 11:59

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