Analysis Of Economy Growth Convergence Among Pan-Pearl River Delta's Provinces

The unbalance of territorial economy development leads to not only economy problem but more serious social problem. Cooperation in economy development among different districts and different provinces in the same district is necessary to settle the unbalance of territorial economy development. Pan-Pearl River Delta's territorial economy cooperation was propounded by local government for enhancing economy cooperation. It is the expression of all levels local governments of Pan-Pearl River Delta for"multiple winner".It is an important topic for discussion that how to get the prospective result of different participants and hold even reduce the development gap, so that the goal of common prosperity is to be reality. We must study the starting terms and reality which based on of Pan-Pearl River Delta's territorial economy cooperation for discussing this topic. One of the starting terms is to judge convergence or diffusion of this district's economy after reforming and opening, and what speed of this trend evolves.In general, Pan-Pearl River Delta's territorial economy has diffusion trend within temporal samples. But there are also different conclusions. There was absolute convergence in the sample 1978-1991, and the coefficient was -0.081,in other words, it will cost this district 9 years to reach half of the long-run equilibrium following the growth speed of 1978-1991.Absolute convergence appeared in the sample 1992-2004,but the coefficient was not significant in statistics. For conditional convergence which has found in other studies, it was not found in three samples with controlling human resource. For club convergence, it was not exist in the sample 1978-2004 and 1992-2004, but there was obvious east and west club convergence in the sample 1978-1991 with controlling region as dummy.In all reasons of Pan-Pearl River Delta's territorial economy development gap, physical capital per person, technology, opening and infrastructure have made significant effect; the human resource that we have expected to be significant disappointed us.For the effect of physical capital per person, the conclusion is diffusion and the coefficient is positive with the model of Islam (1995).For the effect of technology gap, the author's study supports that technology gap is the source of economy growth. Although the extent of technology gap has been obviously reduced in some degree in the three samples, the author has not got the conclusion of convergence, and the conclusion is that the speed of technology gap is 1.3% per year in the sample 1978-2004.Just based on the above, the author predicts that there will be convergence which technology diffusion model has expected in Pan-Pearl River Delta's territorial economy in an enough long-run term.For opening and infrastructure, the author finds the evidence of diffusion and the result is robust in the two of three samples(1978-2004 and 1992-2004)in the extended MRW model. F is the substitute of opening. And they are satisfying in all the three regression. In spite of all the coefficients of F are not significant in the level of 10% in statistics, they are all positive. Those are consistent with our intuition. N is the substitute of infrastructure, and its coefficients are positive and consistent with our intuition in two of three samples(1978-2004 and 1978-1991). What is more, its coefficient is also significant in the level of 1% in statistics in the sample 1978-1991. So, it is not work well to separate infrastructure and opening from starting technology with the analysis of Pan-Pearl River Delta's territorial economy development convergence, perhaps. But it is on the contrary in the analysis of Pan-Pearl River Delta's territorial income gap.For the effect of human resource, the coefficients are all negative in the two of three sample(s1978-1991 and 1992-2004)in extended MRW model which are not consistent with our intuition. The reasons maybe as follows: one is that the data which the author used is not accurate, or the substitute of human resource is the wrong one; the second is that Pan-Pearl River Delta's territorial economy development is caused mostly by government policy, and the effect of human resource cuts no figure.