Acta Geographica Sinica ›› 2011, Vol. 66 ›› Issue (6): 723-731.doi: 10.11821/xb201106001

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Interregional Capital Flows and Regional Development Gap: Analysis of the Inter-bank Credit Flows

CHEN Dong1,2, FAN Jie1,2   

  1. 1. Institute of Geographic Sciences and Natural Resources Research, CAS, Beijing 100101, China;
    2. Key Laboratory of Regional Sustainable Development Modeling, CAS, Beijing 100101, China
  • Received:2010-06-28 Revised:2011-03-18 Online:2011-06-20 Published:2011-06-20
  • Supported by:

    Key Project of National Natural Science Foundation of China, No.40830741; Key Project of the National 11th Five-Year Research Program of China, No.2008BAH31B01; Knowledge Innovation Project of the Chinese Academy of Sciences, No.KZCX2-YW-321

Abstract: It is commonly believed that so far as countries at the early stage of economic development are concerned, capital usually flows from areas with unfavorable conditions to those with favorable conditions, which leads to the Matthew effect and the widening of regional development gap. Inter-bank credit flows are an important form of inter-regional capital flows. This paper used a measuring method to disclose the direction of the inter-bank credit flows between eastern China which has favorable conditions and central and western China which have unfavorable conditions during the period of widening of regional development gaps (1978-2003), and analyzed the causes. It was found that in the years of inter-regional capital flows, no net credit outflows from the underdeveloped areas to the developed areas but the reverse patterns were found. This indicated that the inter-bank credit flow narrowed rather than widened the regional development gap at least to some extent. Further analysis found that the credit control by the Central Government and the changes of market environments formed two periods of inter-bank credit flows before and after 1994 respectively.

Key words: capital flows, regional development gap, credit capital, financial geography, China