Regional Economic Growth And Convergence Analysis

Based on the conclusion that after long-term development, regional economywill eventually form the convergence in the New Classical Economic Theory andcombined with the index of GDP per capita of11cities in Hebei Province from1996to2010, this study aims to figure out the economy and living standard phase of the11cities pertaining to the six phase of economic development formulated by Chenery.By the end of2010, Shijiazhuang, Tangshan, Qinhuangdao, Baoding, Cangzhou,Hengshui and Xingtai are tested in the advanced stage of industrialization whileLangfang, Handan, Chengde and Zhangjiakou are considered to be in the middle stageof industrialization. Then by using the R/S analysis, it calculated the Hurst index andpredicted the future development of economy growth in the11cities of HebeiProvince. The results revealed that the discrepancy in economic growth tends toexpand. Following that it utilized the Barrow regression model to examine sevenindexes including economic base, human capital, labor growth rate, industrializationprocess, government involvement, attract foreign investment level and regionaleconomic policy. The results indicated that the factors influencing regional economicgrowth following such orders: the highest is economic base, followed by governmentinvolvement, foreign direct investment, regional economic policy, industrializationprocess and the last is the level of human capitalPremised on the collected data, this essay applied the convergence model to testthe discrepancy of economic growth in the11cities of Hebei Province. More specific,it used weighted variation coefficient method to test convergence, ADF testmethod was utilized to examine convergence and club convergence model wasemployed to test club convergence. The results displayed that the discrepancy ofeconomic growth in Hebei Province did not exist convergence, convergenceand club convergence which was in accordance with the predicts.The conclusion is not in line with the New Classical Economic Theory. The mainreason is that the cities in HeBei Province bear different economic bases, and therapid development in a short time period cannot compensate the big discrepancy existed before. Meanwhile, under the influence of increasing returns mechanism, thediscrepancy of economic growth between cities in Hebei Province will continue toexpand in the following decades. What’s more, the cities in Hebei Province haveplaced great emphasis on pursuing economic efficiency and adjusting economicstructure which making the big difference in economic performance between cities.Therefore, it is very difficult to present convergence feature.Finally, this essay provides some implications and suggestions from fourperspectives based on the results of the research and the economic conditions of citiesin Hebei Province which include the involvement of government, foreign directinvestment, regional economic policy and the level of human capital.