Convergence Model Application on Regional Economy in Liaoning Province

Based on the regional convergence model and using panel data of 14 cities for the period 1990-2008, this paper makes a test on whether there has regional economic convergence in Liaoning Province. The analysis results suggest that regional economic growth of Liaoning Province does have neither sigma-convergence nor unconditional beta-convergence during the whole period, which signifies that the regional economic disparities will not disappear spontaneously. To try to test for the conditional beta-convergence we introduce more economic variables to convergence model. The results show there has conditional beta-convergence. The urbanization level, fixed asset investment, foreign direct investment, employee number and the secondary industry level prove the major factors to influence regional economic growth.