Convergence and Transitional Dynamics of China's Industrial Output: A County-Level Study Using a New Framework of Distribution Dynamics Analysis

Many scholars have argued that the huge increase in regional inequality in China can be attributed greatly to the disparity in industrialization. This paper contributes to the literature by providing empirical evidence on the transitional dynamics of industrial output by employing a new framework of distribution dynamics analysis, namely the Mobility Probability Plot (MPP), and a database compiled at the county-level. The new framework can address several inadequacies of the traditional display tools in the distribution dynamics literature, while the database is made up of counties and county-level cities in 22 provinces in China. Stochastic kernel analyses are performed for the nation, the economic zones and the provinces individually so as to provide an in-depth understanding of the evolution and convergence of industrial output. This study fills the gap in the literature and provides information on mobility of the county-level units, which can greatly aid the policy making process.