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REGIONAL ECONOMIC INEQUALITY OF CHINA: THE TREND AND INTERPRETATIONS FROM THE INSTITUTIONAL PERSPECTIVE

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Abstract

This dissertation investigates the underlying mechanisms of uneven regional development in China, with a particular focus on institutional factors, given the country’s significant social, economic, and political transitions since the late 1970s. The study aims to empirically analyze the role of state and institutional factors in shaping the spatial distribution of economic activities, in addition to conventional neoclassical factors. The first study calculates regional inequality using the Generalized Entropy indices, with GDP per capita data from sub-provincial levels. The study utilizes innovative remote sensing data, such as nighttime light intensity, alongside census data to measure regional inequality, providing a comprehensive perspective on its evolution. A panel fixed effect model is employed for regression analysis, examining the relationship between various factors and provincial-level inequality over time, with a specific focus on factors representing the state’s role. Empirical evidence indicates that within-group inequalities contributed more significantly to overall regional inequality in China from the early 1990s to the late 2010s than between-group inequalities. Although regional inequality peaked in 2003, according to census data, spatial datasets show a consistent decrease from 1992 to 2019 without any clear turning point. The multi-mechanism regression analysis reveals that provinces with a higher share of private enterprises, increased expenditure decentralization, and greater openness to global trade tend to exhibit higher intra-provincial inequality. This finding underscores the substantial impact of both market and state forces on regional inequality within the Chinese context. The second study employs a quasi-experimental design to investigate the effect of changes in administrative structure on county-level regional economic growth. The study selects counties that became county-level cities during the first round of policy implementation as the treatment group and employs the latest difference-in-difference methods, considering heterogeneous treatment effects across different groups and timings, to estimate the actual treatment effect of administrative structure adjustments. The results demonstrate that upgraded county-level cities did not outperform their county counterparts in urban and economic growth, as measured by average nighttime light intensity. Following the upgrade, the growth rate of county-level cities declined over time. These findings remain significant and consistent after multiple robustness checks. The negative impact of administrative restructuring is closely linked to the detrimental effects of expanding governance scope and diminishing fiscal, economic, and political resources for county-level cities due to the subtle power dynamic shifts accompanying administrative structure adjustments. The third study aims to gain a deeper understanding of the cause-effect relationship of uneven regional development in China by examining the influence of land-based capital accumulation processes. The research offers robust empirical evidence supporting the positive association between urban land leasing—represented by the share of land leasing revenue at the prefecture-level city—and economic growth, as measured by GDP per capita in China between 2007 and 2018. This correlation, which varies spatially and temporally, may contribute to the uneven regional development observed in contemporary China.

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Date Issued

2023-05

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Keywords

Administrative Restructuring; China; Economic Growth; Regional Inequality; Urban Land Leasing; Urbanization

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Committee Chair

Kanbur, Ravi

Committee Co-Chair

Committee Member

Donaghy, Kieran
Li, Shanjun

Degree Discipline

Regional Science

Degree Name

Ph. D., Regional Science

Degree Level

Doctor of Philosophy

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Government Document

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Attribution-NonCommercial-NoDerivatives 4.0 International

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dissertation or thesis

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