Co-Integration Analysis and an Error Correction Model for Urban Land Use Structure and Economic Growth in China

Abstract

Based on the theories of the information entropy of urban land use structure, co-integration and error correction model, this thesis analyses the relationship between economic growth, urbanization level and the information entropy of urban land use structure. The information entropy values of China's urban land use structure from 1981 to 2004 have been calculated in this paper. The relationship between China's GDP and the information entropy of urban land use structure is investigated in details. The results indicate a co-integration relationship between GDP and the information entropy of urban land use structure. However, there is no co-integration relationship between urbanization and the information entropy of urban land use structure. On the basis of the above analyses, the error correction model on GDP and the information entropy of urban land use structure is instituted. The application of the model shows that every 1% decrease in the information entropy value of urban land use structure demands a 59.53% growth in GDP. Because of the existing co-integration relationship between the economic growth and the information entropy of urban land use structure, the order degree of China's urban land use structure has relied heavily on the economic growth for a long time. The economic growth will significantly affect the optimal regulation of urban land use structure in the future. Further investigation also shows that economic growth and urbanization act as the direct driving force of the optimization of urban land use structure, but the optimization of urban land use structure can't promote the economic growth and the urbanization. Therefore, it becomes a very pressing strategic issue to adjust the economic structure and industrial distribution to optimize the distribution of urban land use and to optimize the structure of urban land use to improve the efficiency and promote the socio-economic development.