Determinants Of Urban Growth And Its Efficiency In China: Theory And Evidence

Urban growth is a worldwide phenomenon; however China's urban growth has been more obvious during the past 30 years after reform and opening up. The urbanization is in the accelerated developing stage and its level increased from 17.55 percent in 1977 to nearly 43 percent in 2008. More and more people have migrated from rural area to urban. Urban sprawl is more rapid that the urban built-up area increased from 9386 square kilometers in 1985 to 35469 square kilometers in 2007, which equals a 278% of increase.While China's rapid growth of cities does, how to maintain its sustainable development has many problems. This paper selects the urban growth to take the research subject to explain the reasons for the growth and put forward policy recommendations for the future urban growth.The paper follows management science research paradigm that includes literature review, research design, data analysis and data processing.Firstly, based on models about urban growth, such as static models, the Thǔnen model and the Alonso-Mills-Muth model as well as dynamic model, the Capozza model and the Helsley model, the paper puts forward a urban growth model in China, this model can explain the cause of rapid growth of city in China.Secondly, according to methods of panel unit root, panel cointegration test and spatial econometrics, this paper makes an overall analysis on factors affecting urban growth. The results indicate that the sequence of urban built-up area with GDP, FDI, Investment of fixed assets are cointegrated and GDP,FDI and Investment of fixed assets are key factors affecting urban growth. Besides, these effects exhibit spatial spillovers.Using the two-stage method, DEA and TOBIT model, this paper gives an analysis of China's urban growth efficiency and its influencing factor. The research finds out that China's urban growth is inefficient between 1997 to 2007 as the average level is below 0.55 despite the general tendency is to increase. It also shows that the efficiency of growth in eastern cities is higher than that of western cities.At the end, the paper offers some advices on China's urban growth. Firstly, the way of economic growth must be changed from the extensive growth mode to intensive growth mode. Secondly, the mode of urban growth must be more sensible. Thirdly, explore the optimal regional governance mode and variety governance patterns in order to promote China's sustained development of urban; forth, carry out land reform and establish an unified rural and urban land system, explore an appropriate land use system accompanied with China's urban development; fifth, impose property tax ,rebuild the sub-national financial system and abandon land financial institution.