Globalization and the Growth of Chinese Cities

Cécile Batisse, Jean Brun () and Mary-Françoise Renard ()
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Mary-Françoise Renard: Centre d'Etudes et de Recherches sur le Développement International(CERDI)

No 200424, Working Papers from CERDI

Abstract: China experiences rapid growth in urbanization. This paper investigates whether openness may, ceteris paribus, partly explain the urbanization process. Trade openness and foreign direct investments are often regarded as important explanatory variables during the nineties. However, the impact of the later is expected to be positive, as FDI are mostly concentrated in few urban areas, whereas the impact of the former is a priori less clear. A cross section of 132 cities (data are averaged over the period 1992-1998) is used to carry out an econometric analysis. Trade openness appears only significant and negative for the sub-sample of coastal cities, when Beijing, Tianjin and Shanghai are excluded from the data. Foreign direct investments are significant and positive for the sub-sample of cities with more than one million inhabitants. These results contradict the common view of openness as a positive factor of urbanization in the nineties.

Keywords: China; Cities; FDI; Openness; Panel data; Trade; Urbanization (search for similar items in EconPapers)
Pages: 13
Date: 2004
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