Administrative Boundary Changes and Regional Inequality in Provincial China

Abstract

Although many studies have been conducted on regional inequality, no consistent findings can be produced in terms of the temporal trends and mechanisms underlying regional inequality until now. It is widely acknowledged that the utilization of different data sources, time periods and methodologies gives rise to different measurements of regional inequality. This study aims to shed new light on this issue from the perspective of administrative boundary changes in China. Since the reform and open-door policy in 1978, administrative divisions in China have frequently been adjusted as part of a strategy of the State to promote rapid economic development. This strategy poses a great challenge to the study of temporal trends as well as the causal mechanisms for regional inequality, which has been rarely studied. Taking the Chinese province of Guangdong as an example, this paper adopts a multi-scale decomposition method to demonstrate that administrative boundary changes have a significant impact on the measurement of regional inequality. By excluding administrative boundary changes, previous studies often portrayed a misleading picture of the divergence or convergence of regional inequality. Drawing on a multi-scale and multi-mechanism framework, this paper employs a spatial regression model to investigate the impact of administrative boundary changes on extracting mechanisms of regional inequality. On the one hand, administrative restructuring alters the intensity of spatial dependence of regional development. On the other hand, different combinations of significant driving factors vary under different administrative divisions. Therefore, the consideration of administrative boundary changes would enhance a fuller understanding of regional inequality in China.