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This paper investigates the causal relationship between financial development and the urban–rural income gap in China. Using a bootstrap Granger panel causality analysis, the result indicates that financial development influences urban–rural income gap mainly in Eastern China. The high level of financial development in this region enables rural areas to increase its income. Our results also confirm the existence of the financial Kuznets curve in Eastern China where urban–rural income gap would be first increased and afterwards decreased by financial development. The financial development itself is not dependent on urban–rural income gap as it largely depends on government policies and economic growth. [ABSTRACT FROM AUTHOR]
This study estimates how highways affected industrial development in China's peripheral regions between 1998 and 2007, a period during which China experienced rapid growth in highway mileage. Highways between major cities pass through some counties but not others. Based on this difference in counties' access to highways, we conduct a difference-in-difference propensity score matching estimation, with the treatment variables being counties' highway connection status and their industrial performance before and after being connected to a highway. We find that highways promote industrial development in counties with higher output and greater investment levels. Moreover, highways have differential impacts across industries and regions. [ABSTRACT FROM AUTHOR]