Spatial–Temporal Modeling for Regional Economic Development: A Quantitative Analysis with Panel Data from Western China

Jingxiao Zhang,Hui Li,Chao Wang,Qiaoling Liu

doi:10.3390/su9111955

Jingxiao Zhang, Hui Li + Show 2 more

Open Access

https://doi.org/10.3390/su9111955

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Journal: Sustainability	Publication Date: Oct 27, 2017
Citations: 6	License type: CC BY 4.0

Affiliation: Chang'an University, Louisiana State University

Abstract

The objective of this research is to analyze regional economic difference and explore the influencing factors, which would eventually provide an effective foundation to narrow the regional economic differences. In this paper, a new regional economic difference model is established considering the interactions between the spatial weight and human capital and foreign direct investment (FDI). With the panel data from twelve western provinces in China, the empirical research is conducted by adopting feasible generalized least squares (FGLS) fixed effects model. The preliminary results show that: (1) the spatial spillover effect of human capital and FDI is significant to the formation of regional economic difference; and (2) the total capital formation, government expenditure, FDI, human capital and patent application authorization are positively correlated with GDP growth per capita, while the number of medical institutions is negatively correlated with GDP growth per capita. In addition, the robust test is carried out for validation by using the filter variable method, spatial lag model and spatial error model. The robustness test results show that the results of the FGLS fixed effects model are validated by the filter variable method. The other two robust test results show that: (1) the total capital formation and the fixed asset investment is of 99.9% significance, which represents that they play a key role in the formation of economic development difference; and (2) the coefficients’ symbols of the other variables are consistent with the FGLS fixed effect model but a little different on the significances, which enhance the effectiveness of the proposed regional economic difference model.

Highlights

Economic inequality has become an increasingly prominent global issue for economic development, especially in underdeveloped regions or special regions of developing countries [1,2], for example, the western regions of China
DWEST showed a positive effect on the economic development difference [13], but our work found that, 16 years after implementation, it did not show a significant positive long-term impact on the development of western China
It is a common knowledge to integrate the spatial factor into a general form of spatial–temporal data model by the interaction of weight matrix and influence variables

Summary

Introduction

Economic inequality has become an increasingly prominent global issue for economic development, especially in underdeveloped regions or special regions of developing countries [1,2], for example, the western regions of China. In the underdeveloped areas such as Tibet, Gansu and other provinces, people are suffering a low standard of living, and this seriously affects the social harmony and stability, blocks the process of regional modernization, and influences the efficiency of regional economic development. All of these problems have greatly affected the sustainable and healthy development of Chinese economy [5]. The research objectives of this paper are to realize this need, analyze the important influencing factors of regional economic development using the proposed spatial–temporal model with the latest panel data [6], and provide corresponding suggestions to sustain the economic development in western China

Objectives

Results

Conclusion