Determinants of the Urban GDP per Capita Level in China
This paper explores the possible determinants that affect the GDP per capita levels in cities and towns across China with the purpose of getting an insight into the regional inequality problem on the city level. Although regional inequality has been addressed in a number of publications, they were focused on the province-level data whereas this paper extends the research on the city level. By using cross-section multiple regression analysis, the study identifies the factors influencing GDP per capita in China’s cities. Possible determinants are suggested and tested based on the similar state-level study of the USA with additional factors that are specific for China. The final model indicated the negative contribution of the share of agriculture in the urban economy to the GDP per capita level and the positive regional effect for the cities in Eastern provinces. Apart from that, other regressors were found statistically insignificant in our relatively small data sample. The policy implications for regional inequality reduction are, therefore, further industrialization of cities with a yet high share of agriculture, and promotion of the Interior development projects in inland China to even existing regional effects.