Spatial Impact Of Urbanization On Economic Growth

At present, urbanization is of great importance in China, which has been regarded as the objective law in the society development and also the source of economic growth. Now, under the serious situations that the global economy is low and the reform in China is at the deep stage, governments regard urbanization as the new driving force. Conclusively, during the urbanization process, clarifying how the urbanization affects economy growth plays a great role in the reasonable economy development.Based on the theories of Spatial Externalities, Growth Role and Core-Periphery structure, this paper absorbs the spatial elements into the analysis of urbanization. Firstly, in the theoretical analysis, spatial aggregation economic effects, diseconomy of aggregation and diffusion effects compose the mechanism of urbanization on economy. Then, from the year of1949to2013, according to the time and spatial description of the developments of economy and urbanization, results show that the developments are rapidly, however great gap is existed in different regions and the spatial dependence is notable. In order to explore the spatial relationships between urbanization and economy growth, this paper applied spatial econometrics which is still in the stage of infancy in China, into the spatial relationship research. Exploratory analysis is used to test the spatial correlation, which shows that the spatial dependence is too obvious that the traditional econometrics cannot suit. Then, based on the expanded Cobb-Douglas method, spatial error model and spatial lag model are used to clarify the effects of urbanization on economic development.Results show that disparities in regions and the cluster effects are eye-catching. The urbanization of people is always a motor to the economy; besides the urbanization of economy is gradually playing a more important role in the economy growth under the optimization of industrial structure. However, the spatial urbanization does adverse effect to the development of economy. Besides, economy returning effect is serious. The spatial effects of urbanization of population and economy are negative to economy in neighboring regions, while the effects of spatial urbanization can boost the growth of economy in other regions. The traditional factors such as labor and capital investments also play great roles in the economy, which are similar to the effects of marketization and openness; besides, the effects of government are limited.Taking the theoretical analysis and empirical analysis into consideration, this paper puts forward several policy suggestions. Firstly, government should take the spatial dependence into consideration to utilize the coordination between regions. Secondly, all aspects of urbanization should be developed in order to liberate the.restraints. Besides, motivating other factors is also necessary to the mutual development in regions. The innovations in this paper conclude:on the one hand, the spatial externalities are applied into the theoretical analysis; on the other hand, this paper researches the spatial relationship of urbanization and economy development in the method of spatial econometrics.