Does High-Speed Railway Influence Convergence of Urban-Rural Income Gap in China?

Weidong Li,Olli-Pekka Hilmola,Xuefang Wang

doi:10.3390/su12104236

Weidong Li, Olli-Pekka Hilmola + Show 1 more

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https://doi.org/10.3390/su12104236

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Abstract

Transportation is an important factor affecting the balance of regional economic pattern. The construction of high-speed railway enhances the mobility of population, capital, technology and information resources between urban and rural areas. Will it further affect the income gap between urban and rural areas? Based on the nonlinear time-varying factor model, this paper analyzes the convergence of urban-rural income gap with the angle of high-speed railway. After rejecting the assumption of overall convergence in the traditional four economic regions, three convergence clubs of urban-rural income gap were found. For these ordered logit regression model is used to explore the initial factors that may affect the formation of “convergence club”. Empirical results show that the construction of High-speed railway has effectively narrows the urban-rural income gap in China, but it is not the cause of the formation of the three convergence clubs. The convergence effect of High-speed railway on the urban-rural income gap in China is still relatively weak.

Highlights

Since the reform and opening up, China’s economy has maintained rapid growth
Does high-speed railway affect the income gap between urban and rural areas to form a convergence club? The research goal of this paper is to evaluate the impact of the opening of high-speed railway on urban-rural income gap based on club convergence and deeply analyze the mechanism of high-speed railway’s economic convergence effect on urban-rural income gap
High-speed railway effect of convergence of urban-rural income gap is not significant. This indicates that the current impact of China’s High-speed railway construction on the urban-rural income gap is relatively weak compared to the impact of local government intervention and foreign direct investment

Summary

Introduction

Since the reform and opening up, China’s economy has maintained rapid growth. The income level of residents in urban and rural areas has increased significantly. China’s urban-rural income gap has shown a long-term gradual decline, but in absolute terms, it is still substantial. According to the National Bureau of Statistics, the disposable income ratio of urban and rural residents in China during 2017 was 2.71:1 [1]. It has declined compared with previous years, it is still one of the important factors that constraints China’s economic development. Under the grim situation of China’s urban-rural income gap, it is debated how to find a solution. Approaching this gap is an important issue of concern to academics and government

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