The coastal-inland income gap in China from 1991 to 1999: the role of geography and policy
The coastal-inland income gap in China from 1991 to 1999: the role of geography and policy
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).
University of Southampton
Wang, Z.
8983928f-aca4-4b48-a71b-959646c6aa77
O'Brien, R.
6d46f2be-6f1d-4bcd-9b94-baedee23ff22
2003
Wang, Z.
8983928f-aca4-4b48-a71b-959646c6aa77
O'Brien, R.
6d46f2be-6f1d-4bcd-9b94-baedee23ff22
Wang, Z. and O'Brien, R.
(2003)
The coastal-inland income gap in China from 1991 to 1999: the role of geography and policy
(Discussion Papers in Economics and Econometrics, 301)
Southampton.
University of Southampton
Record type:
Monograph
(Discussion Paper)
Abstract
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).
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Published date: 2003
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Local EPrints ID: 33201
URI: http://eprints.soton.ac.uk/id/eprint/33201
ISSN: 0966-4246
PURE UUID: 6786a68c-1918-464a-8dfa-435ef8039ba9
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Date deposited: 18 May 2006
Last modified: 15 Mar 2024 07:43
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Author:
Z. Wang
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