From clusters to transformation: how high-value agricultural clusters narrow the urban–rural income gap in China

This study aims to examine the impact of Internet development on the urban-rural income gap in China. By using a provincial level panel dataset comprising 31 of China’s provinces, it analyzes and compares the effects of the eastern, central, and western regions over the period of 2005–2016. The results show that Internet development aggravates the gap in the central region much more than that in the eastern and western regions. The trade openness expands the urban-rural income gap only in the eastern region. Urbanization reduces the urban-rural income gap in the western region more than that in the eastern and central regions. Additionally, the regional economic development level also reduces the urban-rural income gap in central region more than that in the eastern region. FDI reduces the urban-rural income gap only in the central region. Additionally, while the urban-rural income gap can widen further by Internet development with trade openness, it can be decreased if Internet development is combined with FDI and urbanization. To reduce urban-rural income gap, the government should accelerate the construction of Internet according to regional differences.

The considerable gap between urban and rural areas in China has been one of those social problems during the urbanization process. Since the early 2000s, an increasing number of theoretical and empirical studies have discussed the association between urbanization and urban-rural income gap (URIG) in China. However, a very limited consensus has been reached so far, which makes it challenging to support formulating well-informed policies. To identify factors contributing to different conclusions of the effects of urbanization on URIG in China, we conducted a systematic literature review of 29 empirical studies and stepwise meta-regression analysis from 94 direct effect-size estimates. Our findings reveal that while urbanization is associated with larger URIG when URIG is measured via urban-rural income/consumption, urbanization is associated with smaller URIG when URIG is measured with inequality index (e.g., Theil index and/or Gini coefficient). Additionally, financial development is correlated with larger URIG. By contrast, human capital level, agricultural support policy, and farmland scale contribute to narrowing URIG. Finally, we did not find a significant publication bias from the primary studies. This work suggests that it is worth to conduct more in-depth analysis to examine the heterogeneous effects of different indicators of URIG and their associations with other potential driving factors. Future work is suggested to investigate the effects of financial development level, human capital level, agricultural support policy, farmland scale, and urban land scale on the relationship between urbanization and URIG. In the urbanization process, policymakers need to pay attention to the practice of remedying income-based urban-rural inequality.

PurposeTaking 30 provincial samples from 2001 to 2017 in mainland China as the research objects, this paper aims to evaluate the impact and effects of foreign direct investment (FDI) on the urban–rural income gap and reveals heterogeneity across regions.Design/methodology/approachFirstly, the Theil index is used to measure the income gap between 30 provinces in mainland China from 2001 to 2017, then the spatial econometric model is used to empirically test the impact of foreign direct investment on China’s urban–rural income gap and its heterogeneity across regions. Finally, a robustness test is performed.FindingsThe results show that there is a significant inverted U-shaped relationship between FDI and the urban–rural income gap in China. That is, FDI expands the urban–rural income gap in the short term and helps to converge it in the long term. In the eastern region, FDI has a convergence effect on the urban–rural income gap in the short term, which increases the long term. However, in the central and western regions, the relationship between FDI and urban–rural income gap has a weak inverted U shape.Originality/valueBy assessing the impact of FDI on the urban–rural income gap, this work provides decision-making support for China and other developing countries to improve investment policies and income distribution policies.

Effects of economic growth target on the urban–rural income gap in China: An empirical study based on the urban bias theory

This paper takes the inter-provincial panel data of China from 1999 to 2015 as the research sample and uses the GMM estimation method to empirically test the relationship among education input, social security expenditure, and urban-rural income gap. The results show that education input and social security expenditure have a significant impact on the urban-rural income gap, and there are regional differences. Specifically, the augments of education input and social security expenditure widens the urban-rural income gap in the western region, and narrows the urban-rural income gap of the eastern and central regions but has less impact on the eastern region. The paper provides a new perspective for understanding the urban-rural income gap in China, and has a significance meaning for further increasing the educational investment in the western rural areas, and improving the redistribution efficiency of social security expenditure.

Purpose This study examines whether, how and under what conditions high-value agriculture (HVA), as embodied in the characteristic agricultural product advantageous areas (CAPAs) policy, helps reduce the urban–rural income gap (URIG). Design/methodology/approach Exploiting panel data covering 1,723 counties in China from 2014 to 2022, this study employs a staggered difference-in-differences (DID) approach based on the quasi-natural experiment of the CAPAs policy to evaluate whether HVA narrows the URIG. It further identifies the underlying mechanisms, heterogeneous effects across five product types and the synergies between CAPAs and other rural development policies. Findings The CAPAs policy significantly reduces the URIG. This effect is primarily achieved through improving factor allocation, strengthening agricultural branding and fostering specialized agricultural entities. The impact varies across product types–CAPAs focused on grains, economic crops and livestock products significantly contribute to narrowing the gap. In contrast, those centered on forestry products tend to exacerbate inequality, and CAPAs for aquatic and horticultural products are statistically insignificant. Furthermore, policies such as socialized agricultural services, rural e-commerce, agricultural credit and agricultural insurance substantially enhance the effectiveness of CAPAs in reducing the URIG. Originality/value This study aims to fill the gap in causally identifying the impact and mechanisms of HVA on the URIG, while also examining agricultural product heterogeneity and policy complementarities, thereby providing insights for the governance of urban–rural transformation in developing economies.

A re-examination of the influence of human capital on urban-rural income gap in China: College enrollment expansion, digital economy and spatial spillover

This paper is concerned with the evolutionary trend of Chinese urban–rural residents’ income gap and find out its main influencing factors. Firstly, the current situation and historical evolutionary trend of urban–rural residents’ income gap in China were analyzed. The results demonstrated that since the reform and opening up in 1978, the Chinese urban–rural income gap shows the phase change characteristics: reduced—expanded—again reduced—again expanded—flattened. Then, by using the data from 1978 to 2010, multiple linear regression models were established to identify the correlation between urban–rural income gap and its influencing factors. The study proves that the urban–rural dual structure, employment structure and urbanization have positive correlation with urban–rural income gap, and there is a negative correlation between rural financial development level and urban–rural income gap.

With the rapid development of China’s economy, urbanization is gradually accelerating, but the income gap between urban and rural areas is growing, which may constrain economic development. To test the impact of urbanization on the urban–rural income gap, this paper uses panel data of 31 provinces (cities/autonomous regions) in China from 2007 to 2018, and combines ArcGIS technology to construct Spatial Dubin Model. This paper finds that the increase in urbanization level in China can significantly reduce the urban–rural income gap. The mediating effects model further shows that the increased level of urbanization in China promotes the flow of factors, which helps the flow of capital and advanced technology into the countryside and increases productivity. It also promotes the transfer of a large amount of surplus labor to the tertiary sector, adjusting the industrial structure and increasing the income of peasants moving to the city. In addition, the development of urbanization in China can lead to the construction of public education, improving the conditions and quality of education and teaching, and increasing the possibilities for farmers to earn high incomes. As a result, the urban–rural income gap in China has been narrowed. The findings of this paper are useful for understanding the underlying mechanisms in the level of urbanization and the urban–rural income gap in China. It provides policy insights for accelerating China’s new urbanization process and promoting the coordinated development of China’s urban and rural regions.

Digital financial inclusion (DFI) helps to narrow the income gap between urban and rural areas, but path dependence may lead to spatial agglomeration in the development of DFI, causing the spatial effect on the urban–rural income gap. This study mainly examines the mechanism and effect of DFI on the urban–rural income gap in China, including its spatial effect issues. Results show that China’s DFI has different impacts on the urban–rural income gap in the east, central, and western regions, showing evident spatial heterogeneity. In addition, the development of DFI has spatial agglomeration, and its impact on China’s urban–rural income gap also has a spatial spillover effect. Moreover, the spatial effect of DFI is mainly because of the path dependence on the development of traditional finance and digital technology. The spatial correlation between them is transmitted to DFI, and the impact of digital technology development is greater. Finally, corresponding policy recommendations are proposed based on the conclusions.

Since the reform and opening up some forty years ago, China has suffered from a capital shortage problem. To both solve this problem and satisfy its economic and social needs, China has been bringing in foreign investment, much of which has gone toward economic reconstruction. However, with the continuous inflow of foreign direct investment (FDI) into China, not only has the gap between rich and poor become increasingly wide but, due to China’s unique dualistic economic structure, the gap between urban and rural areas also appears to be widening. This aspect of the problem has attracted the attention of scholars around the world, as it may affect the future sustainable development of China’s economy and society. Cognizant of the need for practical solutions, this study conducts a more in-depth study of the relationship between foreign direct investment and the urban–rural income gap in China. Based on a review of previous studies and panel data from 30 Chinese provinces, this paper argues that FDI will affect this income gap through mechanisms such as employment structure, industrial structure and international trade. The findings of this study suggest that FDI inflows will first improve income inequality between urban and rural Chinese at a point in time but then have a worsening effect. In addition, China’s three major economic zones are examined, with results showing that the overall impact of FDI on the urban–rural income gap in China displays an inverted ‘U’ curve. Today, the impact of FDI on the urban–rural income gap is on the right-hand side of the curve, with regional differences in its impact. Urban–rural income inequality in the eastern region responds the most to FDI.

This paper analyses the effect of foreign trade in China on the urban-rural income gap from certain angles including trade scale, trade structure and trade mode at the national and provincial levels. The empirical results indicate that, from the perspective of trade scale, the export and import in the eastern and national regions have an expansion effect on the urban-rural income gap, and, in the central regions, they have a reduction effect. Furthermore, export in the western regions has a reduction effect while import in these regions did not have a significant effect. From the perspective of trade structure, the trade of high-tech products and labour-intensive products in the national and eastern regions has an expansion effect, and the trade of the above-mentioned products in the central regions has a reduction effect. The trade of labour-intensive products in the western regions has a reduction effect, and that of high-tech products an expansion effect. From the perspective of trade mode, processing trade and general trade in the national and eastern regions have an expansion effect, while in the central regions they have a reduction effect. General trade in the western regions would expand the urban-rural income gap, and processing trade does not have a significant effect. Consequently, when the South African Government is working out trade multiplicative and corresponding policy, they should consider the development of foreign trade and should pay attention to the labour market structure.

Is urbanization narrowing the urban-rural income gap? A cross-regional study of China

While China has seen an economic boom in recent decades, ecological issues are becoming increasingly challenging, with biodiversity seriously threatened. Establishing nature reserves (NRs) is deemed a feasible measure to ease ecological pressure, but few studies have evaluated the impact of the establishment of NRs on the urban–rural income gap. Therefore, based on the county-level panel data from 2010 to 2018, this study analyzed in depth the effects of the establishment of NRs on the urban–rural income gap in China. The results suggested that establishing NRs is beneficial to bridging the income gap between urban and rural areas, especially in the western and the northeastern regions. In contrast to other levels (provincial level, city level, and county level), the establishment of national-level NRs demonstrated a more prominent effect on narrowing the urban–rural income gap. It is thus proposed to improve corresponding laws to strengthen the protection of NRs, especially for those located in the western and northeastern regions, where the increase in eco-economic compensation and development of tourism brands for the ecological tourism industry are of necessity. Taken together, this study provides evidence that the establishment of NRs alleviates the urban–rural income gap in China.

This paper mainly discusses the relationship between financial development and rural-urban income gap in eastern, middle and western regions in China during the period of 1980-2015, and analyzes the difference between the two relations in the three regions. The research results show that the scale and efficiency of the financial development in the whole country have enlarged the income gap between urban and rural areas. The impact of financial development scale on the rural-urban income gap in the eastern and western regions is significantly greater than that in the middle regions and the whole country, while the impact of financial development efficiency on the rural-urban income gap in the East and the whole country is significantly greater than in the Middle and Western regions.