The Spatial Network Structure of China's Provincial Economic Growth: Re-examination Based on Nonlinear Granger Causality Test

Liu Huajun, He Liwei

Journal of Finance and Economics Vol. 42, Issue 02, pp. 97 - 107 (2016)  DOI:10.16538/j.cnki.jfe.2016.02.009

Abstract

This paper considers the nonlinear trend of spatial condution of economic growth and uses the newly developing nonlinear Granger causality test to identify the spatial spillover relationship of economic growth at provincial level, and reveals the characteristics of its network structure within an analytical framework of social network. It comes to the results as follows: firstly, linear Granger causality test underestimates seriously spatial association of provincial economic growth in China, while the nonlinear Granger causality test method not only reveals more spatial relationships, but also identifies more possible spatial spillover channels, providing further empirical support for promoting spatial synergies of China's economic growth; secondly, China's provincial economic growth shows a state of closer and more stable network structure as a whole, and no one province can be independent on the overall network in maximum likelihood network (ML-Network) of provincial economic growth in China. "Those who do not seek the global cannot seek a domain", we must re-examine China's coordinated regional economic development from overall and global perspectives, explore and create more spatial spillover channels, exert different functions of different plates of economic growth and realize the spatial coordinated development of regional economy.

Keywords

nonlinear Granger causality test; economic growth; spatial network structure; ML network