Abstract
The aim of this paper is to document the role of spatial effects in the relationship between urban trends and economic development in China, between 1984 and 2004. During this period the Chi-nese urban system experienced dramatic changes, with significant rural-urban, intra-provincial and interprovincial migration, mainly after the 1993 reforms that eased the former Hukou rule and abolished the prevailing cross-region labor mobility restrictions. This study draws upon recent econometrical tools based on spatial panel data models, developed in order to deliver evidence for a linear relationship between urbanization rates and GDP per capita and an inverted-U relationship between urban primacy and GDP per capita in the Chinese provinces.
Highlights
Following work from Williamson (1965), Rosen and Resnick (1980) argue that developing regions feature transitional urban dynamics: urban concentration characterises the first stages of economic development under agglomeration scale economies and rural-urban migration; demographical dispersion appears within more developed countries, because of the geographical diffusion of market effects and lower transport costs due to mass transport technologies
The nonagricultural employment is well correlated with urbanization, but much less with urban primacy
Regarding model 1, the export rate becomes significant for urbanization after the 1993 reforms and China’s opening to foreign investments
Summary
Following work from Williamson (1965), Rosen and Resnick (1980) argue that developing regions feature transitional urban dynamics: urban concentration characterises the first stages of economic development under agglomeration scale economies and rural-urban migration; demographical dispersion appears within more developed countries, because of the geographical diffusion of market effects and lower transport costs due to mass transport technologies. Wheaton and Shishido (1981) assume an inverted-U curve relationship between urbanisation and the non-agriculture gross domestic product. According to MacKellar and Vining (1995), most countries feature a 5000$ per capita income trade-off point, above which urbanisation trends change. Junius (1999) explored the hypothesis of an inverted U curve between economic development and urban primacy. Catin et al (2008) examine a three stages’ development model with regards to urbanisation dynamics: the first stage features a pre-industrial economy, with low GDP/capita and weak urbanisation; the second stage corresponds to. Urban Trends and Economic Development in China: Geography Matters!
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