Economic openness, government efficiency, and urbanization

Zuocheng Chen and Krishna Paudel

Review of Development Economics, 2021, vol. 25, issue 3, 1351-1372

Abstract: We develop a theoretical model of the impact of economic openness and government efficiency on urbanization. The theoretical model is supplemented with the Malmquist–Luenberger index of Super‐slack‐based measure with undesirable outputs and dynamic panel data model. The empirical models use data collected from 30 provinces in China from 2004 to 2017. Results indicate that improvement in the level of trade openness in an urban area can increase the urban population. The improvement in government efficiency in an urban area can also increase the urban population. Regional trade openness can effectively promote regional migration. Trade openness has a mediation effect between government efficiency and migration. We also find that trade openness favors female rather than male migration to urban areas.

Date: 2021
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