Endnotes

^* Xiao Geng is Associate Professor, School of Economics and Finance, University of Hong Kong and John Weiss is Director of Research at the Asian Development Bank Institute, Tokyo and Professor of Development Economics, University of Bradford, UK. The views expressed are those of the authors not of their respective institutions. The authors are grateful for the comments of Heather Montgomery and Wang Xiaolu. Author contact address is John Weiss and j.weiss@bradford.ac.uk.

¹ This classification comes from Hu (2004).

² For a recent survey on regional development that also draws on a new database for empirical analysis on convergence, see Song (2005).

³ These results refer to 'absolute' convergence, with no qualification for other controlling factors; see Song (2005). For other measures that reflect the same trend like the Gini coefficient and the Theil index, see Cai et al (2002). Tests for 'conditional convergence' range from support over a long period in Cai et al (2002) to only 'hints at' in Demurger et al (2002:457) and weak support in Jones et al (2003) for shorter periods.

⁴ See Demurger et al (2002) tables 2, 4, 5 and 9.

⁵ Positive effects of FDI on growth are reported in Chen and Fleisher (1996) and Demurger (2001) at the provincial level, in Jones et al (2003) at the city level and in Mody and Wang (1997) for coastal provinces. Demurger et al (2002) report a negative impact of SOE share on growth. Their FDI variable is correlated with their policy index and is generally insignificant for this reason.

⁶ Demurger (2001) finds a composite transport density variable and a variable reflecting telephone access to be significant in explaining provincial growth. The impact of the transport variable is non-linear and diminishes with increases in the variable. Earlier work by Mody and Wang (1997) for industry data across the coastal provinces finds a similar result with a road variable significant but with diminishing impact. In their analysis the telecommunications variable has positive increasing returns.

⁷ See Demurger (2001) table 3.

⁸ See Poncet (2003), who suggests that overall the tariff equivalent of internal barriers to trade was as high as 51% in 1997 and that this had risen from 37% in 1987 and 41% in 1992.

⁹ A very detailed analysis of this data is in Xiao (2005) and this paper draws on the results there. Full results of the analysis are presented there.

¹⁰ See Xiao (2005) tables 2.21-2.25.

¹¹ Although our productivity indicator is a measure of single factor productivity, since we include change in the capital-labor ratio in our model implicitly our sector dummies pick up total factor productivity effects.

¹² See for example Qunhui (2004).

¹³ Dollar et al (2003) table 6. This analysis measures investment climate in various ways and north east cities do not invariably appear to do poorly by the indicators used. However, Harbin has the longest wait time to hear a court case of any city surveyed and Benxi has the second highest local tax rate of any city.

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