Government institutions and the dynamics of urban growth in China

Rodríguez-Pose, Andrés and Min Zhang
Authors registered in the RePEc Author Service: Andrés Rodríguez-Pose

No 13505, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Economic growth in China in recent decades has largely rested on the dynamism of its cities. High economic growth has coincided with measures aimed at improving the efficiency of local governments and with a mounting political drive to curb corruption. Yet the connection between government institutions and urban growth in China remains poorly understood. This paper is the first to look into the connection between government efficiency and corruption, on the one hand, and urban growth in China, on the other and to assess what is the role of institutions relative to more traditional factors for economic growth in Chinese cities. Using panel data for 283 cities over the period between 2003 and 2014, the results show that urban growth in China is a consequence of a combination of favourable human capital, innovation, density, local conditions, foreign direct investment (FDI), and, city-level government institutions. Both government quality - especially for those cities with the best governments - and the fight against corruption at the city level have a direct effect on urban growth. Measures to tackle corruption at the provincial level matter in a more indirect way, by raising or lowering the returns of other growth-inducing factors.

Keywords: Economic growth; Cities; Government efficiency; Corruption; China (search for similar items in EconPapers)
JEL-codes: O43 R11 R58 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-sbm, nep-tra and nep-ure
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Citations: View citations in EconPapers (44)

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Related works:
Journal Article: Government institutions and the dynamics of urban growth in China (2019)
Working Paper: Government institutions and the dynamics of urban growth in China (2019)
Working Paper: Government institutions and the dynamics of urban growth in China (2019)
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