The Dynamics of Economic Growth 1985-2000 in Chinese Provinces
Abstract
This paper concerns the provincial growth pattern in China during the period 1985-2000. The hypothesis that provinces with similar growth rates are more spatially clustered than by pure chance is tested. In addition, we test the convergence hypothesis. We find evidence of spatial dependence between neighboring provinces and solve it by including a spatial lag, alternatively a spatial error term, in the growth equation. Other important factors explaining the provincial economic growth are foreign direct investments, infrastructure, preferential policies, and the distribution of industrial enterprises.