Interregional Disparity and Convergence Tendency: An Empirical Study of TFP Growth in China

Abstract

This paper presents an empirical analysis to improve our understanding of the catch-up and convergence tendencies of total factor productivity (TFP) growth across the Chinese provinces over 2003–2012. After controlling for the province heterogeneity, our regression results show that the Chinese provinces exhibit significant conditional convergence in TFP growth over the sample period. This indicates that province-specific factors play an important role in determining provincial TFP growth. Economic policies conducive to faster TFP growth should thus be directed to the relevant factors underlying the province heterogeneity. This paper suggests that openness to international economic activities and human capital accumulation are two important factors that promote TFP growth, both of which rely on a salutary social infrastructure.