Study On Coordination Among Economic Growth And Finance Development And Urbanization

Urbanization has become the economic growth engine for the next stage of China’s development, with far-reaching positive significances in stimulating investment, boosting domestic demand, improving people’s livelihood, cracking agriculture issues as well as avoiding the middle-income trap. In 2010 the State Council issued the National Planning of Main Functional Areas which specifies the names of more than one hundred urban cities grouped in sample urban clusters searving as the major forces in urbanization development. National Strategy for New-type Urbanization plans to coordinates all those urban clusters in the form of network, through which the full-scale national urbanization can be achieved. However, the fast growing rate of urbanization also brings about many problems along with its achievements, including all sorts of imbalance and disorders, such as population transfer and land expansion mismatch, industry development and labor migration are not synchronized, the developments of big cities and small towns are not coordinated etc.. All those issues mentioned above deeply hinder the national level urbanization realization. Previous studies have demonstrated that amongst economic growth, financial development, and urbanization, two of which exists a close interaction. Each one of them is interlocked with another. None of them can be developed in a health fashion without smooth coordination with the other two. Therefore, if some problems occurred in any aspect of them, one should not only look inside, he must look outside to find the truth, i.e. the coordination among this aspect and other elements.This study focuses on the coordination among economic growth, financial development and urbanization in China, also how the spatial elements impact such coordination. The main body of dissertation can be summarized as "two-step mechanism" and the "two-step empirical studies".The first step in "two step mechanism" is to explore the specific process of interaction between economy growth, financial development and urbanization. By using production factors as intermediate variable, this part illustrates how economic and financial resources combined together to achieve industry upgrading, which is the backbone of "industrial urbanization". Later, it discusses how "industrial urbanization" leads to "population urbanization" and "space urbanization" and finally be concluded as the full achievement of whole urbanization. Eventually what it argued above will be presented as a circular map.The key to prove the first step in "two step mechanism" in the empirical study is to find out that "industrial urbanization" actually acts as a leading role in the full process of urbanization, serving as a bridge connecting them and leading elements in economic&financial resources to the realization of "population urbanization" and "space urbanization". In this case, the empirical study introduces spatial elements into consideration. Armed with spatial regression analysis, this part of study uses interaction items as criteria in regression, drawing the conclusion that industrial upgrading has the heaviest weight in three channels through elements in economics&finance to urbanization, in contrast with other two channels like knowledge spillover and capital deepening.The second step in "two step mechanism" is based on the circular map and illustrates that under the condition of urban clusters; the circular map would be tempered and influenced. And the reason why that happens lies in the core-periphery structure which is caused by differences in development among sample urban clusters. Pareto analysis proves that the impact will affect the coordiation degree of the three systems in one single urban cluster via changing the ratio of production factors.The second part in "two-step empirical studies" corresponds to the above-described mechanism. This part of study initially quantifies the correlation among economic growth, financial development and urbanization, using the method of loose coupling. Then, it individually calculates the spatial correlation of those coupling results by Moran Index, which generates negative results. It proves the hypothesis in second step of mechanism saying that the coordination of three systems in one single city cluster would be negatively affected by the change of neighbor urban group’s coordination degree, when they are in core-periphery structure.All those main bodies of discussion and illustration are put in Chapter 3 and Chapter 5, which is also the core of this dissertation. Besides that, Chapter 4 is introduced to give statistic descriptions of all 21 sample urban clusters in terms of economic growth, financial development and urbanization from year 2006 to 2013. In the end of the dissertation, it comes up with a case study, willing to prove that the polarization of economic growth and that of three-system coordination happens almost at the same time, by crunching the data collected from two of 21 urban clusters.Through all the above theoretical and empirical study, the dissertation eventually draw the conclusion that negative spatial correlation in three-system coordination degree among urban clusters does exit, and the reason lies below. First, according to China New-type Urbanization Outline (2014-2020), China’s urbanization shall be achieved in the units of urban cluster. Secondly, even though such outline or plan to realize full urbanization still belongs to the theory of regional polarization, it made a little adjustment to the original practice under the strategy of imbalanced regional development. In the past, the authority has divided our nation into three regional parts, thus east, middle and west, hoping to initially develop the eastern part and then use its radiation effect to bring up the economy of middle and west part. However, in the recent report, this thought has been adjusted to sprawling city clusters in the whole nation, each cluster with its own economic polar. Then, the whole development would be finally achieved by connecting all those dots in the map. It is a great thinking, I shall say. But, under the long-time influence of "east, middle and west" dividing, the regional gap is big enough to push each neighbouring city cluster into core-periphery structure, and have negative spatial impact to its neighbor city cluster regarding to three-system coordination.Unlike preceding relative studies which mainly focus on the internal side of urbanization hoping to tackle the problem, this paper insists that all sorts of issues deterring the harmony of urbanization lie in its coordination among economic development and financial development. In return, such coordination is determined by the spatial effect caused by its neighbor city group under the core-periphery structure. Secondly, few studies has been seen in which all China’s city groups are almost sampled. Scholars in the past are more willing to take typical studies on a single Yangtze River Delta, Pearl River Delta, Beijing, Tianjin or region. In contrast, this paper covers all developed and underdeveloped urban agglomerations which would be more conducive to find out the general law. Finally, there are many papers using spatial econometric analysis or loose coupling method, however, few had been performed to exam the spatial correlation of coordination results of three-system in city groups.