Abstract
Balanced and coordinated economic development across regions is a critical goal of regional economic development and new-type urbanization in China. However, few studies have examined economic growth convergence clubs at the county level. To extend the research on convergence clubs, this research applies a log t convergence test and a dynamic spatial ordered probit model (DSOP) to endogenously identify economic growth convergence clubs in counties and to examine the influence of initial states and structures on club convergence probability. The study sample covers 2286 counties of China from 1992 to 2010. The results show significant convergence club patterns at the county levels, resulting in the gradual formation of six convergence clubs. The DSOP estimation results show that per capita fixed assets, population density, and industrialization have promoted convergence club formation to varying degrees.
Highlights
Since the late 20th century, classical economic growth theories have been questioned and challenged
In applying the log t test for the identification of economic growth convergence clubs in data from 2286 counties across China, the convergence was not found for the total sample at the 5% significant level
Six significant convergence clubs of county economic development in China were identified using the log t test with GDP per capita, and the results confirm that the six convergence clubs differ significantly from one another
Summary
Since the late 20th century, classical economic growth theories have been questioned and challenged. Other economic growth theories suggest that economies with similar initial structures cannot develop different degrees of overall convergence [7]. The gradual movement toward a steady state of equilibrium promotes the development of convergence clubs [7] It indicates that economies with semblable structural characteristics may be able to converge to dissimilar steady state equilibria, they have different initial conditions. A common growth path is not unexpected for a group of semblable economies, only if their initial states are likely to initiate the same long-run equilibrium [12] In this sense, the convergence club method can provide a more authentic and micromesh view of regional economic growth than the traditional convergence method [13]
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