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Do Economic Reforms Promote Urbanization in India?


  • Tripathi, Sabyasachi


We assess the impact of economic reforms on urbanization in India for the period of 1991 to 2016. It is found that economic reform variables (except import of goods and services as % of GDP) have a positive effect on urbanization. The vector error correction model shows that economic reforms have influenced only on total urban population with a very slower rate with the speed of adjustment of 0.003. The short run effect is also negligible. Granger causality test shows that there is no causal relationship between them. Therefore, we conclude that economic reforms do not promote urbanization in India. Economic reforms for urbanization are required though promotion of small and medium cities, human capital, cultural mobility and formulating proper plans for new green cities.

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  • Tripathi, Sabyasachi, 2018. "Do Economic Reforms Promote Urbanization in India?," MPRA Paper 86591, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:86591

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    References listed on IDEAS

    1. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April.
    2. Tripathi, Sabyasachi, 2012. "Does higher economic growth reduce poverty and increase inequality: Evidence from urban India," Working Papers 289, Institute for Social and Economic Change, Bangalore.
    3. Kalamkar, S.S., 2009. "Urbanisation and Agricultural Growth in India," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 64(3), pages 1-20.
    4. repec:eee:wdevel:v:98:y:2017:i:c:p:413-429 is not listed on IDEAS
    5. Sabyasachi Tripathi, 2015. "An Overview of India’s Urbanization, Urban Economic Growth and Urban Equity," International Journal of Economics and Empirical Research (IJEER), The Economics and Social Development Organization (TESDO), vol. 3(3), pages 115-127, March.
    6. Tripathi, Sabyasachi & Kaur, Shupinder, 2017. "Do negative externalities have any impact on population agglomerations? Evidence from Urban India," MPRA Paper 76897, University Library of Munich, Germany.
    7. Sabyasachi Tripathi & Chetana Rani, 2018. "The impact of agricultural activities on urbanization: evidence and implications for India," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 22(1), pages 123-144, January.
    8. Sabyasachi Tripathi, 2013. "Do Large Agglomerations Lead To Economic Growth? Evidence From Urban India," Review of Urban & Regional Development Studies, Wiley Blackwell, vol. 25(3), pages 176-200, November.
    9. Gibson, John & Datt, Gaurav & Murgai, Rinku & Ravallion, Martin, 2017. "For India’s Rural Poor, Growing Towns Matter More Than Growing Cities," World Development, Elsevier, vol. 98(C), pages 413-429.
    10. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
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    More about this item


    Economic reforms; urbanization; Time series modeling; India.;

    JEL classification:

    • C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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