Parameter Heterogeneity,Convergence Of Urban Economy

Few countries in the world can catch up with the pace of China's economic growth.Since the reform and opening up,China has maintained a rapid growth of economic every year,the living standards of the people is increasing in the background of the rise of the great powers.However,the coexistence of regional disparity and economic growth is also very significant and the imbalance of regional economic development is a major obstacle to the construction of a harmonious society and the realization of common prosperity,so whether the regional economy can achieve convergence has become a hot topic in recent years.At present,there are a large number of literatures on the analysis of the regional economic convergence in China,but it is regrettable that the conclusions drawn from the existing studies are not consistent,even different.The conclusion is different because of the following three reasons: first,there are differences in the selection of data and variables as well as the design of indicators;Second,the regional gap is a dynamic process,the different sample period results may vary,and study the sequence inevitably leads to different literature selected sample periods are not the same;Thirdly,the difference between the research methods and the model selection leads to different results.From the current study,regression was performed using either cross-sectional data or panel data,and in the study of economic convergence,we adopt the method of mean regression,which assumes that the parameters are homogeneous and ignores the existence of heterogeneity.However,the cross-sectional regression model which considering the heterogeneity of the parameters(such as the cross sectional quantile regression)ignores the individual effect,and this leads to inaccurate estimates.In terms of data and variable selection,most of the existing research and analysis based on the data of each province provinces,so the congenital gap is bigger than the city(Xianxiang Xu and Li Xun,2004),which is sufficient to explain the economic gap between regions.Therefore,this paper aim at the problems in the study of economic convergence,with the expansion of the Solow model as the foundation,using the panel quantile regression model,This paper makes a regression analysis on the convergence of urban economy in our country as the research object,and strives to draw more accurate conclusions,in order to supplement and develop existing research.In the part of theoretical analysis,this paper combs and comments on the existing literature at home and abroad,and analyzes the differences and connections between different convergence methods.Finally,the Solow model based model part of the empirical study.In the part of empirical analysis,this paper makes use of the annual economic data of 183 prefecture level cities in China in 1991-2014,by using quantile regression for panel data with the fixed effect,analysis of the phenomenon of economic convergence between China's urban economy from different sub sites,and compared with the mean regression of panel data,the existence of parameter heterogeneity is proved.The results of this study show that: first,different from the traditional mean regression model(such as panel data fixed effect regression),this paper found evidence of heterogeneity of parameters,that is,the same variable at different points of the regression coefficient is significantly different;Second,generally there is the phenomenon of conditional convergence between China's urban economy,and the increase of the initial per capita income level has a greater negative impact on the economic growth rate in the city with faster economic growth;Third,physical capital has a positive effect on economic growth,this role in the area of slow economic growth is more obvious;Fourth,human capital investment promotes economic growth in the low growth rate of the sub site,and hinders economic growth in the high growth rate of the sub point.Fifth,the growth of population has hindered the development of economy,which is more obvious in the less developed areas.At the same time,the higher the economic growth rate is,the higher the economic growth rate is.In this paper,the following four policy suggestions are put forward at the end of the paper: First,if we want to narrow the gap between the actual GDP per capita in the region,we should increase the material capital investment in the economically backward areas,while for the developed areas,the proportion of material capital investment can be reduced appropriately;Second,we should strengthen the management of the educational level and the quality of education in the economically backward areas.Third,we should increase the infrastructure construction in the backward areas,improve the medical and health conditions in the backward areas and improve the social security system in the backward areas.At the same time,to promote the free flow of population in various regions in order to alleviate the population pressure in the backward areas;Fourth,technological progress is the driving force of economic growth,the current level of technology lags behind the development of the economy,and we should promote technological progress,efforts to narrow the gap between the region through the adjustment of industrial structure and encourage innovation,increase research funding.