Growth convergence and local steady states across Chinese prefectures

Abstract

ABSTRACTThis article investigates how economic growth paths diverge across Chinese prefectural cities. Based on the conditional convergence hypothesis, the analysis includes inward foreign direct investments and patent applications to the European Patent Office as additional proxies of steady-state income levels and allows the convergence parameter to vary across groups. The results show that within-convergence rates are different across groups, but growth drivers positively affect both intraregional and interregional catching up.