Analysis Of The Effect Of Urbanization On Economic Growth In China

From the development of human society, it can be seen that urbanization often goes with economic growth. The level of urbanization has become a significant standard to evaluate the economic and social development and civilization progress. The relationship between urbanization and economic growth has become a hotspot in academic and policy circles. Since Chinese economy has entered into a new normal, new urbanization construction, as the engine of economic and social development, has been given priority to studies on how to stabilize economic growth. Therefore, this paper attempts to explore different effects of urbanization on economic growth among different regions through clarifying promotion mechanisms of urbanization, building a panel data model and conducting empirical research, which has significant theoretical and practical values in this field of research.In then Chapter1, this paper reviews some previous studies about the relationship between urbanization and economic growth, and finds out some deficiencies in those papers and presents this dissertation’s own analytic method. hen it summarizes theories on the effect of urbanization on economic growth, and explains the promotion mechanism of urbanization on economic growth from the perspective of total supply and total demand. After that, Chapter3makes descriptive statistics and correlation analysis on urbanization and economic growth, and then measures Chinese urbanization regional difference by using the standard deviation, coefficient of variation, location entropy index. Chapter4introduces the panel data of urbanization rate of31provinces in China from2002to2013to testify the relationship between urbanization and economic growth from the section-time-index dimension, and further measures different effects of urbanization in eastern, central, and western China. Finally, it gives the conclusion and puts forward some countermeasures and suggestions.The possible innovation of this paper includes:Firstly, the promotion mechanisms of urbanization on economic growth include element agglomeration, innovation incentives, industrial upgrading mechanisms of total supply, and consumption stimulation, investment, and export coordination mechanisms of total demand. Secondly, there is high consistency between urbanization and economic growth, where the correlation coefficient is up to0.9875. At the same time, the result based on standard deviation, coefficient of variation and location entropy index analyses shows that the gap of urbanization is narrowing around the country, while it extends in the west of China. Thirdly, the results of variable coefficient and variable intercept model estimation based on panel data of31provinces in China from2002to2013show that there is remarkable positive correlativity between urbanization an economic growth, and the effect of urbanization on economic growth is different in eastern, central, and western China, which presents a gradient distribution:through optimizing the population education structure, urbanization has the least positive influence on economic growth in the east, the most positive influence in the middle and a relatively less positive influence in the west.