Abstract
Purpose: The paper is going to analyze that there are dynamic quantitative relationships between Chinese urbanization and service industry. Design/methodology/approach: According to the index number of value-added of service industry and town population/ total population ratio during the year of 1978 to 2012 in China, the paper is designed with models which are analyzed by ADF test, co-integration test, error correction model and Granger causality test, finally get the conclusion. Findings: The paper achieves the two conclusions, one is that urbanization is the important power of service industry’s growth; the other is that the level of urbanization improves the level of service industry recently. Originality/value: Chinese urbanization and service industry have close relationship, and they also have dynamic changes. The paper studies their dynamic changes through collecting a lot of data from the year 1978 to 2010 and developing models to make quantitative analysis, for example, tables and quotations in the paper are the best proof. At last, the paper also puts forward some suggestions after get the conclusion that Chinese urbanization is the motive power to the growth of service industry.
Highlights
The process of Chinese urbanization has become one of the major research topics among the domestic scholars and overseas scholars
On the basis of the error correction model, we find that the two variables’ short-term dynamic equilibrium relationship refers to that once the urbanization level changes 1 unit each time, the proportion of the service industries’ output value will change 0.257279 units in the same direction
According to Chinese data in the year of 1987-2010, we make ADF unit root test, cointegration test, error correction model test, vector auto regression analysis and Granger causality test between urbanization level and the index number of value-added of service industry in China, so the conclusions can be drown: From the co-integration equation, we can find that the equation fitting very well and the coefficients are more significance; from the co-integration model, the level of urbanization and the development of service industry have the positive correlation; we conclude that the level of urbanization promotes the development of service industry, in other words, urbanization is the power of promoting the growth of service industry
Summary
The process of Chinese urbanization has become one of the major research topics among the domestic scholars and overseas scholars. “The urbanization of China” and “The high-tech of America” have been called two key factors that affect all mankind in the 21 st century by Stieglitz. What he has said include that China’s urbanization will play the lead role in regional economic growth, and will produce most important economic interests (Jiang, 2011). According to Petty-Clark’s law, with a corresponding increase of per capita national income, the labors will transfer to the secondary industry and other non-agricultural sectors; what’s more, with the further development of the economy, the labors will transfer to the service industry. The relationship between the service industries’ development and urbanization has attracted more and more scholars’ attention
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