Search results

1 – 10 of over 6000
Article
Publication date: 1 February 2022

Diandian Chen and Yong Ma

Since 1978, China has made tremendous economic achievements through industrial upgrading. However, these achievements are accompanied by an expanding income gap between rural and…

Abstract

Purpose

Since 1978, China has made tremendous economic achievements through industrial upgrading. However, these achievements are accompanied by an expanding income gap between rural and urban areas. The purpose of this paper is to examine the relationship between industrial structure and urbanrural income inequality in China.

Design/methodology/approach

Using the fixed-effects model and provincial data for the period 1985–2019, this paper estimates a linear relationship between industrial structure and urbanrural income inequality. By decomposing total income inequality into four components, the paper then analyzes how industrial structure affects each component.

Findings

The results show that industrial structure imbalance and industrial upgrading are positively associated with urbanrural income inequality. The positive effect of industrial imbalance mainly comes from widening the wage gap, while that of industrial upgrading mainly comes from aggravating business income inequality and property income inequality. Moreover, industrial balance and upgrading are conducive to increasing the share of wage income at the cost of property income.

Originality/value

By progressively examining the total inequality and the inequality of income components, this paper provides a better understanding of how industrial structure affects urban and rural income inequality. The findings of this study highlight the “inequality cost” associated with industrial structure adjustment, which provide policy-related insights on the balance development of urban and rural areas.

Details

China Agricultural Economic Review, vol. 14 no. 3
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 5 September 2016

Chunlai Chen

The purpose of this paper is to analyse the impact of foreign direct investment (FDI) on urban-rural income inequality in China.

2015

Abstract

Purpose

The purpose of this paper is to analyse the impact of foreign direct investment (FDI) on urban-rural income inequality in China.

Design/methodology/approach

This study uses the provincial-level panel data and employs the fixed-effects instrumental variable regression technique to investigate empirically the impact of FDI on urban-rural income inequality in China.

Findings

The study finds that while FDI has directly contributed to reducing urban-rural income inequality through employment creation, knowledge spillovers and contribution to economic growth, FDI has also contributed to increasing urban-rural income inequality through international trade.

Practical implications

The study has some policy implications. First, as the study finds that FDI not only contributes to reducing urban-rural income inequality through employment creation, knowledge spillovers and contribution to economic growth, but also contributes to increasing urban-rural income inequality through international trade, therefore, apart from improving local economic and technological conditions to attract more FDI inflows, China should re-design FDI policies by shifting away from encouraging export-oriented FDI to encouraging FDI flows into the industries and sectors in line with China’s overall economic structural adjustments and industrial upgrading. Second, policies should focus on increasing investment in infrastructure development and in public education, which not only can reduce urban-rural income inequality but also can attract more FDI inflows. And finally policies should be designed to accelerate urbanisation development by focusing on urban-rural integrated development, household registration system reform and proper settlement of rural migrants in urban areas, thus reducing urban-rural income inequality.

Originality/value

The paper makes two major contributions to the literature. First, the paper adopts the fixed-effects instrumental variable regression technique to deal with the endogeneity issues in estimating the impact of FDI on urban-rural income inequality, producing more consistent estimates. Second, the paper investigates not only the direct impact of FDI on urban-rural income inequality through the effects of employment creation, knowledge spillovers and contribution to economic growth, but also the indirect impact of FDI on urban-rural income inequality through its activities in international trade, adding new empirical evidence to the sparse literature on the impact of FDI on income inequality in China.

Details

China Agricultural Economic Review, vol. 8 no. 3
Type: Research Article
ISSN: 1756-137X

Keywords

Article
Publication date: 1 February 2005

Shujie Yao, Zongyi Zhang and Gengfu Feng

Fast growth in China has led to significant improvement in people's living standards and average income. However, it has also brought about a huge rise in inequality. The purpose…

4206

Abstract

Purpose

Fast growth in China has led to significant improvement in people's living standards and average income. However, it has also brought about a huge rise in inequality. The purpose of this paper is to analyse regional and ruralurban inequality using a few income and consumption indicators.

Design/methodology/approach

Data are collected from official statistical sources for all the Chinese provinces over 1978‐1995. Both parametric and non‐parametric methods are used to study the inequality between regions and between the rural and urban sub‐populations. The parametric approach is to test whether per capita incomes among provinces converged over time. The non‐parametric approach is the calculation and decomposition of the Gini coefficient by population sub‐group and income source.

Findings

The results show no evidence of growth convergence in per capita GDP, income and expenditure across provinces, but clear evidence of divergence in per capita rural (and urban) incomes and total expenditures. Three‐quarters of inter‐provincial income inequality are explained by inter‐rural/urban inequality. Inter‐provincial inequality explains more than half of rural inequality and less than half of urban inequality in most years.

Originality/value

This paper uses one of the most complicated datasets for the Chinese regions. It studies inequality using different economic indicators. It considers the different dimensions of inequality in China using two different approaches. The results are important for regional development policies.

Details

Journal of Economic Studies, vol. 32 no. 1
Type: Research Article
ISSN: 0144-3585

Keywords

Article
Publication date: 18 January 2013

Aviral Kumar Tiwari, Muhammad Shahbaz and Faridul Islam

The purpose of this paper is to investigate the impact of financial development on the ruralurban income inequality in India using annual data from 1965 to 2008.

2384

Abstract

Purpose

The purpose of this paper is to investigate the impact of financial development on the ruralurban income inequality in India using annual data from 1965 to 2008.

Design/methodology/approach

The Ng‐Perron unit root test is utilised to check for the order of integration of the variables. The long run relation is examined by implementing the ARDL bounds testing approach to cointegration.

Findings

The results confirm a relation among the variables. Evidence suggest that financial development, economic growth and consumer prices aggravate ruralurban income inequality in the long run.

Research limitations/implications

The present study offers fresh insights to policy makers on crafting appropriate policies that reduce ruralurban income inequality in India.

Originality/value

The contribution of this paper is lies in extending the literature in the context of India towards an extensively researched area of ruralurban divide but in time series framework and utilization of a better approach of time series approach, i.e. ARDL. Specifically, to the best of the authors' knowledge, this is the first empirical study to test poverty‐finance nexus using the basic principles of the GJ hypothesis and provide evidence of short‐ and long‐run dynamics on the postulated relation for India.

Details

International Journal of Social Economics, vol. 40 no. 2
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 10 October 2016

Madhu Sehrawat and A.K. Giri

The purpose of this paper is to examine the relationship between financial development and rural-urban income inequality (INQ) in South Asian Association for Regional Cooperation…

1545

Abstract

Purpose

The purpose of this paper is to examine the relationship between financial development and rural-urban income inequality (INQ) in South Asian Association for Regional Cooperation (SAARC) countries using panel data from 1986-2012.

Design/methodology/approach

The stationarity properties are checked by the LLC and IPS panel unit root tests. The paper applied the Pedroni’s panel co-integration test to examine the existence of the long-run relationship and coefficients of co-integration are examined by fully modified ordinary least squares. The short-term and long-run causality is examined by panel Granger causality.

Findings

The results of Pedroni co-integration test indicate that there exists a long-run relationship among the variables. The findings suggest that financial development increases rural-urban inequality whereas trade openness reduces rural-urban inequality. The empirical results of panel Granger causality indicate evidence of short-run causality confirms that economic growth and financial development causes rural-urban INQ.

Research limitations/implications

The present study recommends for appropriate economic and financial reforms focusing on financial inclusion to reduce rural-urban INQ in SAARC countries. Financial policies geared toward agriculture and rural population should be adopted to reduce the prevailing rural-urban INQ in SAARC region.

Originality/value

Till date, there is hardly any study exploring the causal relationship between financial development and rural-urban INQ for SAARC countries by using panel co-integration and causality techniques. So the contribution of the paper is to fill these research gaps in the literature.

Details

International Journal of Social Economics, vol. 43 no. 10
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 2 October 2017

Varun Chotia and N.V.M. Rao

The purpose of this paper is to investigate the relationship between infrastructure development, ruralurban income inequality and poverty for BRICS economies.

1274

Abstract

Purpose

The purpose of this paper is to investigate the relationship between infrastructure development, ruralurban income inequality and poverty for BRICS economies.

Design/methodology/approach

Pedroni’s panel co-integration test and panel dynamic ordinary least squares (PDOLS) have been used to carry out the analysis.

Findings

The empirical findings confirm a long-run relationship among infrastructure development, poverty and ruralurban inequality. The PDOLS results suggest that both infrastructure development and economic growth lead to poverty reduction in BRICS. However, ruralurban income inequality aggravates poverty in these nations. The paper advocates for adopting policies aimed at strengthening infrastructure and achieving economic growth to reduce the current levels of poverty prevailing in the BRICS nations.

Originality/value

Significant limitations exist in the literature in terms of not clearly defining the nature of relationship and interlinkages between infrastructure development, poverty and inequality, with regard to the BRICS nations. The available studies mainly focus on the relationship between infrastructure and growth, with the universal agreement being that these two are positively related. However, it is still not right to assume that economic growth attributable to infrastructure development will, therefore, subsequently lead to a reduction in inequality. This forms the basis for this study, that is, to critically examine the relationship between infrastructure development, inequality and poverty for BRICS nations.

Article
Publication date: 26 January 2022

Zi Hui Yin and Chang Hwan Choi

A wide urbanrural income gap exists in China despite the implementation of pro-rural policies. Additionally, with the proliferation of the internet and information technology…

1868

Abstract

Purpose

A wide urbanrural income gap exists in China despite the implementation of pro-rural policies. Additionally, with the proliferation of the internet and information technology, the promotion effect of e-commerce on the economy has become apparent. Accordingly, China has been actively encouraging rural households to participate in e-commerce activities. This study aims to examine the effect of e-commerce on the urbanrural income gap.

Design/methodology/approach

In the study, linear and panel threshold models were applied to provincial-level panel data from 2002 to 2018.

Findings

The results of the linear model show that e-commerce contributes to narrowing the urbanrural income gap. Moreover, the panel threshold model results show that the narrowing effect exists in regions where the e-commerce intensity is at a medium-to-high level and urbanization is at a relatively low level; otherwise, e-commerce has no effect. In addition, in regions with a relatively high level of public expenditure and education, the income-gap-narrowing effect of e-commerce is more than double.

Practical implications

The urbanrural income gap can be reduced by promoting e-commerce and reducing the urbanrural divide in e-commerce use.

Originality/value

To determine how varying levels of e-commerce development affect the urbanrural income gap across regions, the study proposes four key causes of the digital divide in e-commerce: e-commerce intensity, public expenditure level, urbanization level and education level and applies the variables as threshold variables to examine the non-linear effect of e-commerce on the income gap.

Details

Internet Research, vol. 32 no. 4
Type: Research Article
ISSN: 1066-2243

Keywords

Article
Publication date: 27 September 2011

Jialu Liu

Many countries have experienced, or are experiencing, urbanization. One such example is China. Even though the large‐scale ruralurban migration seems chaotic on the surface…

1639

Abstract

Purpose

Many countries have experienced, or are experiencing, urbanization. One such example is China. Even though the large‐scale ruralurban migration seems chaotic on the surface, there are certain underlying forces driving individual decisions. The purpose of this paper is to provide some understanding of the relationship between human capital, migration, and occupational choices.

Design/methodology/approach

The paper starts with an overlapping generations model. Human capital plays various roles across different occupations – it does not affect the income of farmers, it affects income of workers linearly, and it has increasing returns in rural non‐farm business. The paper then derives income profiles for individuals with heterogeneous human capital, and finds the human capital thresholds of occupations. The paper calibrates the model to China, and simulates the model to answer two questions: how does an improving human capital distribution affect rural wages, quantities of migrants and return migrants? How does a fast‐growing urban wage rate affect rural wages, quantities of migrants and return migrants?

Findings

First, depending on the initial human capital level, policies aiming to enhance human capital may have different impacts on migration. If the initial human capital level is low, these policies will yield more permanent migrants; on the contrary, if the initial human capital is at a relatively high level, then a shrinking permanent migrant class with a growing entrepreneur class can be expected. This results in an inverted U‐shaped relation between the initial human capital level and the size of the permanent migrant class. Second, even though the non‐farm business of return migrants helps raise rural wages, the income inequality between rural and urban areas is not eliminated and migration is persistent. Third, borrowing constraints limit the size of rural non‐farm businesses and slow down the development of rural industry. The fourth and final point is that, migration costs discourage labor mobility and reduce the quantities of both permanent migrants and entrepreneurs.

Originality/value

This is an original paper on this subject.

Details

Indian Growth and Development Review, vol. 4 no. 2
Type: Research Article
ISSN: 1753-8254

Keywords

Article
Publication date: 4 December 2017

Atul Mehta and Joysankar Bhattacharya

The purpose of this paper is to examine the direct (microcredit), medium-direct (bank credit), and indirect (through economic growth) effect of financial sector development (FSD…

Abstract

Purpose

The purpose of this paper is to examine the direct (microcredit), medium-direct (bank credit), and indirect (through economic growth) effect of financial sector development (FSD) on rural-urban consumption inequality (RUCI) in India using state-wise annual data from 1999-2000 to 2011-2012.

Design/methodology/approach

A panel data analysis for a sample of 15 major Indian states using the generalized method of moments estimators provides an empirical evidence for the direct (microcredit), medium-direct (bank credit), and indirect (economic growth) effect of FSD on RUCI.

Findings

FSD is pro-urban in India resulting in a declining rural-urban consumption ratio (RUCR) and increasing RUCI. The negative effect of FSD on RUCR is greatest through the medium-direct channel followed by the indirect and direct channels.

Research limitations/implications

The study questions the social banking initiatives of the government in rural areas where more than 80 percent of the poor reside. There is a need for restructuring financial inclusion programs with a shift in their focus on rural areas and an improved mechanism to target the poor.

Originality/value

The paper proposes that formal financial services by banks are primarily availed by non-poor and urban population and hence acts as a medium-direct channel whereas the semi-formal financial services by microfinance institutions specifically target the rural poor and act as a direct channel to affect the poor. It is the first ever study to use state-wise data on microcredit disbursed under Self-help Group Bank Linkage Program to assess the direct impact of FSD on RUCI.

Details

International Journal of Social Economics, vol. 44 no. 12
Type: Research Article
ISSN: 0306-8293

Keywords

Article
Publication date: 29 June 2021

Guohua Yu and Zheng Lu

The purpose of this study is to elaborate the theoretical mechanism of rural credit input affecting the urbanrural income gap from the perspective of labor transfer, and use a…

Abstract

Purpose

The purpose of this study is to elaborate the theoretical mechanism of rural credit input affecting the urbanrural income gap from the perspective of labor transfer, and use a dynamic panel mediation model to test the transmission mechanism of rural credit input affecting the urbanrural income gap through labor transfer, so as to provide an empirical basis for narrowing the urbanrural income gap in China.

Design/methodology/approach

This paper constructs a mechanism analysis framework for rural credit input affecting the urbanrural income gap. From the perspective of resource allocation and labor transfer, the authors expound the transmission path of rural credit input to the urbanrural income gap and analyze the theoretical mechanism of rural credit input that affects the urbanrural income gap through labor transfer. Based on this, this paper uses the dynamic panel mediation model to test the effect relationship between rural credit input, labor transfer and urbanrural income gap in 31 provinces of China from 2009 to 2018.

Findings

In theory, increasing rural credit input can ease the financial constraints on the development of “agriculture, rural areas and farmers” and provide capital accumulation for the development of rural non-agricultural industries. The development of rural non-agricultural industries can provide more jobs for rural surplus labor, thereby increasing the labor rate of return in rural areas, and ultimately conducive to narrowing the urbanrural income gap. Further, increasing rural credit input can improve the development level of rural non-agricultural industries, thereby promoting the transfer of agricultural labor. At the same time, rural credit input based on the intermediary variable of labor transfer has a significant inhibitory effect on the urbanrural income gap.

Research limitations/implications

This study mainly focuses on the relationship between rural credit input, labor transfer and urbanrural income gap, so it is impossible to use micro-level data to further verify the impact of rural credit input on labor transfer. At the same time, the collection of indicators of rural credit investment in the China Financial Yearbook only started in 2009, which limited the number of samples to a certain extent.

Practical implications

This paper assumes that the economy is mainly composed of urban and rural economic sectors. Therefore, labor can flow freely between urban and rural areas. However, in the near future, China's rural secondary and tertiary industries may develop rapidly, especially with the in-depth implementation of rural revitalization strategy, it is very important to pay attention to the current situation of rural industrial structure and incorporate the factors such as rural industrial structure into the existing model.

Social implications

This study attempts to provide a new perspective and inspiration for rural credit input, the optimal allocation of labor force and narrowing the urbanrural income gap under China's rural revitalization strategy.

Originality/value

Based on the analysis framework of neoclassical economic theory, this paper uses the constant elasticity of substitution production function to establish an urbanrural two-sector nested model that includes credit supply variables and analyzes the mechanism of rural credit input affecting the urbanrural income gap through labor transfer.

Details

China Agricultural Economic Review, vol. 13 no. 4
Type: Research Article
ISSN: 1756-137X

Keywords

1 – 10 of over 6000