Government-driven urbanisation and its impact on regional economic growth in China

This article interrogates the role of local Chinese governors in government-driven urbanisation. This process often involves local governments converting rural land to urban land rather than local governments incentivising rural-to-urban migration. This study proposes a method to find a proxy variable of government-driven urbanisation and performs an exploratory study of its impact on economic growth. Its empirical analysis is based on provincial data from 1996 to 2015, a period of intense urbanisation in China. The results show that urbanisation has had various effects on growth across different provinces, and that some provinces exhibit a phenomenon called 'urbanisation without growth'. This may be because local governors push urbanisation too heavy that it can hardly generate positive effects, such as external consumption, technology diffusion, and a larger pool of urban labour. This is similar to the phenomenon of over-urbanisation experienced in some developing countries. As a main driver of over-urbanisation, government-driven urbanisation has typical Chinese characteristics, but this paper's findings still have significant implications for other emerging economies.

Automated summary

This article examines the impact of government-driven urbanization on economic growth in China, finding that some provinces exhibit 'urbanization without growth' due to excessive promotion of urbanization by local governments. These findings have significant implications for other emerging economies.