Government institutions and the dynamics of urban growth in China

Andrés Rodríguez-Pose and Min Zhang

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

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 link between government efficiency and corruption, on the one hand, and urban growth in China, on the other hand 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 the urban growth in China is a consequence of a combination of favorable human capital, innovation, density, local conditions, foreign direct investment, 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: O4 R11 R58 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2019-09
New Economics Papers: this item is included in nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

Published in Journal of Regional Science, September, 2019, 59(4), pp. 633 - 668. ISSN: 0022-4146

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http://eprints.lse.ac.uk/91717/ Open access version. (application/pdf)

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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