Industrial structure upgrading, urbanization and urban-rural income disparity: evidence from China

ABSTRACT

This study examines the influence of industrial structure upgrading in China on urban-rural income disparity. Using panel data from 30 provinces with the empirical analysis methodology, we find that, during 2013 and 2018, industrial structure upgrading in China plays a significantly positive role in narrowing urban-rural income disparity. By the mechanism analysis, we find that urbanization rate is an intermediary variable which affects this causation. Further, urbanization in industrial structure upgrading for the influence of narrowing rural-urban income disparity existing in threshold effects, and threshold levels present a regional difference. Using the urban-rural consumption gap as the proxy variable of income gap, the result is still stable.

KEYWORDS:

• Industrial structure upgrading
• urban-rural income disparity
• threshold test
• mediating effect test

JEL CLASSIFICATION:

• D31
• D63

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ Source: China Statistical Yearbook, 2019

² Source: China Statistical Yearbook, 2019.

³ First, the independent variable (AIS_it) is shown to affect the dependent variable (Theil_it) significantly in the first equation; second, the independent variable (AIS_it) plays a significant positive role in affecting the mediator (urbanization_it) in the second equation; and third, in the last equation, the mediator affects the dependent variable (Theil_it) significantly and the independent variable has no effect when the mediator is controlled.

Additional information

Funding

This work was supported by the School of Economics of Yunnan University in China.