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What has caused regional income inequality in China? Effects of 10 socioeconomic factors on per capita income

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Abstract

This study analyzes the driving factors behind regional income inequality to provide an important reference for China and other developing countries and to support the formulation of more effective regional development policies. The study used data from 625 county-level administrative units in China in 2017 and conducted a total factor analysis of China's regional income based on 10 economic dimensions using spatially explicit regression methods. The results show that commerce, population footprint, industrialization, and investment are the main factors that affected a Chinese region’s income, but different factors have different degrees of influence in different regions. The impact of economic institutions (developing an institutionally diverse market economy) on income cannot be ignored. Based on our findings, China should give local governments more autonomy, so they can formulate strategies that account for local constraints and opportunities, thereby increasing their chances of decreasing regional income inequality.

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Acknowledgements

This work was supported by the National Key Technology R and D Program (No. 2016YFC0501002). We thank Geoffrey Hart (Montréal, Canada) for editing an early version of this paper. We are also grateful for the comments and criticisms of the journal's anonymous reviewers and our colleagues.

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  1. School of Economics, Minzu University of China, No. 27 Zhongguancun South Street, Haidian District, Beijing, 100081, People’s Republic of China

    Weiming Li, Zhaoyang Cai & Shixiong Cao

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  1. Weiming Li
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S.CAO designed the research; W.LI and Z.CAI performed the data analysis and wrote the main manuscript text. All authors have reviewed the manuscript and approved it for submission.

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Correspondence to Shixiong Cao.

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Li, W., Cai, Z. & Cao, S. What has caused regional income inequality in China? Effects of 10 socioeconomic factors on per capita income. Environ Dev Sustain 23, 13403–13417 (2021). https://doi.org/10.1007/s10668-020-01218-7

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