Company Background Bitstream Is A Software Company That Has Identified An Opportunity Todevelop And Market A New Product

2850 words - 12 pages

Spatial analysis on regional economic growth of China

1. Introduction
Economic growth is always an important topic in the economics research. Many study in the past just considered region as an isolated “island”, and the mutual relations among different regions were usually ignored. However, regional economy is an open system. Factors such as trade, factor mobility (labor or capital), and technology or knowledge spillover will all make relations among regions become complicated. Under such circumstance, regional economy is no longer isolated but strongly related. The development of regional economy not only relies on its own endowment, also highly depends on the development of other ...view middle of the document...

Most of research about regional economic study is based on provincial level or city level data (Wu and Xu, 2004), where the spatial correlation method of Moran I is being used widely. Spatial analysis suggests that after more than twenty years development under Chinese Economic Reform and Opening, the spatial association among provinces becomes much closer with the intensified geographical clustering (Wu, 2006).
For the factors that influence regional economic growth, many researches mainly focus on the traditional factors, like labor and physical capital (Raiser, 1998; Wu, 1999; Zhang et al, 2001). Other factors are kept on exploring, like human capital, international trade, foreign direct investment (Lin and Liu, 2003), preferential policy and geographic location (Ying, 2000, 2003), which keeping on giving more comprehensive picture about the mechanism which stimulate regional economic development in China.

3. Spatial analysis
In this part, the existence of spatial correlation of economic growth among different provinces in China will be tested.

1. Research area and data
This paper only focuses on 31 provinces in the mainland China, where Hong Kong, Tai Wan and Macao are not taken into consideration. Per capita GDP is used to measure the regional economic growth, where provincial level per capita GDP data are collected from Chinese Statistical Yearbook over 1978-2008.
Note that Hainan Province was founded by separating from Guangdong Province since 1985 while Chongqing from Sichuan Province since 1996. In order to make the data comparable, I added up nominal GDP of Guangdong and Hainan to get one for
Guangdong Province after 1985, and get the other one for Sichuan Province by adding up Sichuan and Chongqing after 1996. The index for Guangdong after 1985 is calculated by sum of Guangdong and Hainan’s indices weighted by the share of their GDP. The same calculation can be done for Sichuan’s index after 1996.

3.2 Global Moran’s I analysis
In the mainland China, according to geographic location, 31 provinces can be divided into four areas: Eastern Coastal Region; Northeast Region; Central Region and Western region.
At the beginning of the Chinese Economic Reform, which began at 1978, the spatial dependence of economic growth among different provinces is not very obvious. We can see that from Map 1, which is a quantile map of per capita GDP in 1978. In this map, most of the third and fourth range of per caper GDP which represent higher development provinces just randomly distributed in the four different regions. But this spatial relationship grew much stronger during the 1990s under the policy of increased market opening. From Map2, which is a quantile map of per capita GDP in 1998, we can see that now provinces with better development began to cluster in the periphery of the map, which mainly located in the Easter Coastal Region and Northeast Region. While those provinces with lower development level, which...

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