The Research Of Dual Function Mechanism Of Urbanization On Economic Growth

With the increasing urbanization and the accelerated economic growth of China, it has been proved there is a correlation between them, but what is the mechanism of urbanization on economic growth? This is the issue this article attempts to explore. The paper has a analysis from the perspective of the urbanization effects on the economic growth directly at the macro level and in the meso level (the upgrate of industrial structure, the rationalization of industrial structure) and policy coordination level (fiscal expenditure).In this paper, it has a empirical analysis of the mechanism of urbanization on economic growth in country and the east, midland, west using the panel data of 30 provinces from 2000 to 2013. The result of this research indicates:nationally, urbanization can contribute to economic growth directly, can also promote economic growth through the upgrate of industrial structure and fiscal expenditure, but it can't promote economic growth through the rationalization of industrial structure; urbanization can contribute to economic growth directly in the east, midland and west, but the indirect effect is different because of the differences of economic development in these three regions, urbanization can only promote economic growth through the third industry in the east, the influence of urbanization to economic growth through the industry structure and fiscal expenditure is not significant in the midland, urbanization has a positive effect on economic growth through the second industry,third industry and fiscal expenditure in the west; the influence of the control variable on economic growth is in the same direction whether it is at the national level, or in the three regions and is slightly different because of the different economic development in the three regions.Finally, policy recommendations are as follows:accelerate the reform of the household registration system, continue to promote urbanization; establish a scientific system of fiscal expenditure; promotion the upgrate and rationalization of industrial structure in every area.