The Mechanism Of China Urbanization Effects On Economic Growth

ABSTRACT:Since the reform and opening up, China's economic growth, social progress and urbanization have made great progress. China's urbanization has reached to 49.3% in 2009. Urbanization has became a major way to push China's economic growth. So studying about how high-quality of urbanization effect on economic growth is particularly critical.Since the end of 60s in 20th century, through the resarch about urbanization effect on economic growth economists found:urbanization, through the gather of production factors in space, not only to take advantagement in sharing infrastructure, reducing production costs, and geting scale economies. But also can enhance trading efficiency, and development of division of labor and specialization.But there is no empirical or theoretical analysis to prove that there is a direct causal relationship between urbanization and economic growth. It is inevitable that urbanization though one or some elements of economic growth effect on economic growth. This is the content of this study --- the mechanism of urbanization effect on economic growth.Basis for new classical theory, endogenous growth theory, urban economics, through coherent reasoning, taking urbanization though elements of economic growth effect on economic growth as assumption. And then create models to verify the assumption. And use flexibility to explain the influence of urbanization effect on economic growth innovatively.China has obious regional differences, if use the total indicator of the national as research object, the empirical analysis does not have general applicability. So this paper will tske Hebei, Liaoning Province, Guangdong Province data of 1999 -2009 years represent for be the low,medium and high development of China's urbanization level as empirical research object data.The empirical results show that Hebei,Liaoning Province urbanization indeed though promoting physical capital, human capital accumulation, technological innovation to push economic growth. Guangdong Province, mainly through physical capital,human capital promote economic growth, and technological innovation do not form a significant correlation with economic growth. Finally, from the empirical results, to ensure the quality and effectiveness of urbanization effect on economic growth,we will give some suggestions and policy recommendations.