An Empirical Study on Urban Income Disparities in the Greater Bay Area: Evidence from Convergence and Stability Tests

Abstract

This paper examines the evolutionary trend of income disparity and its influencing factors in 11 cities in the Guangdong-Hong Kong-Macao Greater Bay Area. Specifically, the study focuses on whether the regional income gap shows a converging trend and explores the impact of policy synergy, industrial upgrading and population mobility on convergence. By conducting the σ-convergence test and ADF unit root test on the panel data for the period of 2004-2024, the results show that the overall trend of income disparity among cities in the Greater Bay Area has been converging, and the convergence is more significant especially after considering the population weighting. The results of the ADF test show that the economic growth series of most cities are smooth, indicating a convergence of growth paths within the region. The study concludes that policy synergy, industrial upgrading and population mobility play a key role in promoting income gap convergence. Based on this, this paper suggests that the financial mechanism and industrial transfer system should be further improved to promote coordinated regional development, and the analysis of β-convergence and spatial effects should be strengthened in the future to deeply understand the regional convergence mechanism."