The Factors Contribution to Regional Economic Convergence and Disparity in China

This paper investigates the factors' contribution to regional economic convergence and disparity over the period 1978-2004 in China by applying convergence accounting analysis and time-varying parameter model.The main conclusions are as follows:The influential factors causing regional economic disparity in descending order are labor market performance,investment in physical capital,investment in human capital and central govern- ment fiscal expenditures according to their importance,while convergence effect driven by diminishing returns and technological diffusion playing significant role in reducing regional economic disparity and local government fiscal expenditures being roughly neutral on the whole.The above conclusions are helpful for central govern- ment to find implement points of regional economic co-ordinate development strategy and set up effective policy actions.