Contemporary Finance & Economics ›› 2023, Vol. 0 ›› Issue (10): 18-29.

• Theoretical Economics • Previous Articles     Next Articles

Has China’s Industrial Structure Change Narrowed the Regional Economic Gap?

LIU Jin-quan, XUE Wei-wen   

  1. Jilin University, Changchun 130012, China
  • Received:2023-04-05 Revised:2023-08-21 Online:2023-10-15 Published:2023-10-09

Abstract: The coordinated development of regional economy is an important practical problem that China is faced with in the process of building a modern economic system, and it is also the only way to achieve common prosperity. Since the 21st century, the economic growth of China has shown a converging trend of first fast then slow around the node of the year of 2013. Based on the three-sector Mankiw-Romer-Weil extended convergence model including the industrial structure changes, this paper conducts an empirical study. The findings show that industrial structure changes can promote inter-provincial economic convergence as a whole, but there is industrial heterogeneity.The labor inflow into industry has a significant positive effect on the convergence in the short term, while the inflow into the service industry is difficult to promote convergence. Further research shows that from 1998 to 2013, compared with the industrial structure change in the eastern region, which is dominated by the inflow of agricultural labor into the service industry, the industrial structure change in the central and western regions, which is dominated by the inflow of agricultural labor into the industry, has a stronger role in promoting economic growth, thereby narrowing the economic gap between the central and western regions and the eastern regions, and accelerating China’s overall economic convergence; however, after 2013, the industrial structure of the central and western regions has gradually synchronized with the eastern region, both of which are dominated by the inflow of agricultural labor into the service industry, and the inter-provincial economic convergence rate is slowing down.

Key words: regional economic gap, convergence of economic growth, industrial structure, labor productivity

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