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GLOBALIZATION AND REGIONAL INCOME INEQUALITY: EMPIRICAL EVIDENCE FROM WITHIN CHINA
Author(s) -
Wan Guanghua,
Lu Ming,
Chen Zhao
Publication year - 2007
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2007.00217.x
Subject(s) - economics , globalization , inequality , economic inequality , accession , china , income inequality metrics , capital (architecture) , development economics , economic geography , economic system , european union , international economics , geography , market economy , mathematical analysis , mathematics , archaeology
China's recent accession to the WTO is expected to accelerate its integration into the world economy, which aggravates concerns over the impact of globalization on the already rising inter‐region income inequality in China. This paper discusses China's globalization process and estimates an income generating function, incorporating trade and FDI variables. It then applies the newly developed Shapley value decomposition technique to quantify the contributions of globalization, along with other variables, to regional inequality. It is found that: (a) globalization constitutes a positive and substantial share of regional inequality and the share rises over time; (b) domestic capital, however, emerges as the largest contributor to regional inequality; (c) economic reform characterized by privatization exerts an increasingly significant impact on regional inequality; and (d) the relative contributions of education, location, urbanization and dependency ratio to regional inequality have been declining.