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Urbanization and Economic Growth in China¡ªAn Empirical Research Based on VAR Model

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  • Li Yang Zi

Abstract

This paper takes the relation between urbanization and economic growth in China as the object of study. By using the time series data ranging from 1982 to 2014 and building VAR model, it analyzes, respectively, the dynamic relations between economic growth and the urbanization rate of resident population, the urbanization rate of land and the quality of urbanization. The paper comes up with the following conclusions: there exists a unidirectional causality between resident population urbanization and China¡¯s economic growth, the former promoting the long-term growth of the latter; unidirectional causality also exists between land urbanization rate and China¡¯s economic growth. However, different from resident population urbanization rate, it is the economic growth of China that promotes the increase of land urbanization rate and the increase of land urbanization rate cannot promote China¡¯s economic growth; the relation between the quality of urbanization and China¡¯s economic growth is a two-way causality. The improvement of urbanization quality has a cumulative positive effect on the economic growth of China, while economic growth has a negative effect on the improvement of urbanization quality in the short term and positive effect on economic growth in the long term.

Suggested Citation

  • Li Yang Zi, 2017. "Urbanization and Economic Growth in China¡ªAn Empirical Research Based on VAR Model," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(3), pages 210-219, March.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:3:p:210-219
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    References listed on IDEAS

    as
    1. Luisito Bertinelli & Benteng Zou, 2008. "Does Urbanization Foster Human Capital Accumulation?," Journal of Developing Areas, Tennessee State University, College of Business, vol. 41(2), pages 171-184, January-M.
    2. David E. Bloom & David Canning & Günther Fink, 2008. "Urbanization and the Wealth of Nations," PGDA Working Papers 3008, Program on the Global Demography of Aging.
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    More about this item

    Keywords

    resident population urbanization; household registered population urbanization; land urbanization; quality of urbanization; economic growth;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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