Management Review

›› 2020, Vol. 32 ›› Issue (5): 76-86.

Previous Articles     Next Articles

Capital Flow and the Convergence of Economic Growth Clubs: A Case Study of Urban Agglomerations in the Yangtze River Delta

Zhou Di1, Zhong Shaojun2   

  1. 1. School of Mathematics and Statistics, Guangdong University of Foreign Studies, Guangzhou 510006;
    2. School of Mathematics and Statistics, Hubei University of Science and Technology, Xianning 437100
  • Received:2017-08-14 Online:2020-05-28 Published:2020-06-03

PDF (PC)

177

Abstract:

Through a theoretical model, this paper expounds how capital flow contributes the convergence of economic growth clubs, and uses the data of 66 counties and cities in Yangtze River Delta urban agglomeration form 1996 to 2014 to carry out an empirical test. Firstly the paper calculates the degree of capital flow of each city in the urban agglomeration with Gravity model, and then examines the influence of capital flow level on club convergence with the constructed conditional Markov chain model. The findings are as follows: (1) At present, the economic growth of Yangtze River Delta Urban Agglomeration is featured by convergence of clubs of both high growth and low growth even though these clubs have developed for five years; (2) The convergence of the low-growth clubs is deep at the low level of capital flow while the convergence of the high-growth clubs is deep at the high level of capital flow. The fact that cities with high capital flows mainly come under high economic growth club while the low-growth cities mainly come under low-growth clubs is a good reflection of club convergence in the economic growth of Yangtze River Delta Urban Agglomeration. Therefore it is advised to raise the level of capital flow within Yangtze River Delta urban agglomeration so as to achieve coordinated development among clubs.

Key words: club convergence, capital flow, Yangtze River Delta urban agglomeration, conditional Markov chain