The Causal Relationship between Urbanization, Economic Growth and Water Use Change in Provincial China

Chao Bao and Dongmei He
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Chao Bao: Key Laboratory of Regional Sustainable Development Modeling, Institute of Geographic Sciences and Natural Resource Research, Chinese Academy of Sciences, Beijing 100101, China
Dongmei He: Key Laboratory of Regional Sustainable Development Modeling, Institute of Geographic Sciences and Natural Resource Research, Chinese Academy of Sciences, Beijing 100101, China

Sustainability, 2015, vol. 7, issue 12, 1-10

Abstract: The relationship between urbanization, economic growth, and water use change is one of the key issues for China’s sustainable development, as rapid urbanization and continuous economic growth are accompanied by a steady water stress. Thus, we applied a cointegration test and a VECM (vector error correction model) Granger causality test to investigate the causal relationship between the urbanization level, the economic development level, and the total water use in China and its 31 provincial administrative regions during 1997–2013. Results show that the three indicators have a long-run equilibrium relationship in most provincial administrative regions in China. However, the short-run effects and Granger causal relationship are insignificant for China and most provincial administrative regions. Therefore, that an idea such as urbanization as the engine or major driving force of economic growth, and that China’s urbanization and economic growth will bring a water crisis and will be strongly constrained by water resources, might be properly weakened. Targeted and relatively separate policies should be emphasized more for the coordinated development of China’s urbanization, economy, and water resources.

Keywords: urbanization; economic growth; water resources utilization; cointegration test; VECM Granger causality test (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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