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Stochastic Regional Convergence in C hina: The Role of Regional Clusters in a Nonlinear Perspective (1952–2007)
Author(s) -
Herrerias Maria Jesus,
Ordóñez Javier
Publication year - 2014
Publication title -
pacific economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.34
H-Index - 33
eISSN - 1468-0106
pISSN - 1361-374X
DOI - 10.1111/1468-0106.12058
Subject(s) - convergence (economics) , economics , economic geography , divergence (linguistics) , cluster (spacecraft) , perspective (graphical) , nonlinear system , regional development , econometrics , geography , regional science , macroeconomics , mathematics , computer science , physics , linguistics , philosophy , geometry , programming language , quantum mechanics
This paper investigates the notion of stochastic convergence behaviour across the C hinese provinces. Unlike previous works, the present paper takes into account the economic geography by examining the regional clusters and the significant transformation of the C hinese economy through the introduction of structural breaks and nonlinearities in the model. Results indicate that the regional clusters are relevant to the convergence behaviour across C hina, when both the administrative division and the regional clusters are considered. However, the number of provinces that are converging is higher in the latter case. When nonlinearities were considered across the regional clusters, we found that 18 provinces have already converged with their cluster, 3 provinces are catching up and 10 regions show divergence. These findings are useful for the design and development of national and regional economic policies in the C hinese economy.