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Which comes first - urbanization or economic growth? Evidence from heterogeneous panel causality tests

Listed author(s):
  • Brantley Liddle
  • George Messinis

Heterogeneous panel causality tests are employed to consider the relationship between urbanization change and economic growth. Urbanization causes economic growth in high-income countries, but noncausality could not be rejected for both middle-income and Latin American countries. A bi-directional, equilibrium relationship is observed for low-income, predominately African countries where economic growth has a positive, causal effect on urbanization, but where urbanization has a negative, causal effect on economic growth. Hence, urbanization and economic growth either co-evolve in low-income/African and high-income countries, or else the two processes are decoupled for middle-income and Latin American countries.

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File URL: http://hdl.handle.net/10.1080/13504851.2014.943877
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Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 22 (2015)
Issue (Month): 5 (March)
Pages: 349-355

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Handle: RePEc:taf:apeclt:v:22:y:2015:i:5:p:349-355
DOI: 10.1080/13504851.2014.943877
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