Economic Development And Its Spatial Consequences: Urbanization, Geographic Concentration And Regional Income Disparity

Accompanying economic development, dramatic changes have happened in the spatial structure of the Chinese economy, including some significant phenomena: urbanization, biased geographic distribution of the economy and increasing regional income disparity. Utilizing cross country panel data over a long period of time, this thesis has studied these issues from an international comparative perspective and some general laws are explored. Based on the findings from comparative studies, the author also made forecasts on China's future.Firstly, the author studied the relationship between urbanization and economic development. Both parametric and semi-parametric models give consistent results, showing an S-shaped relationship between the two, implying that urbanization will accelerate when a country enters the"middle-income"strata. It is also found that China's economy follows this same rule. The forecast of the model showed that in the next 20 years, the urban population ratio of China will grow by about 1% per year.After collecting time series regional data for the 14 largest economies of the world, including the very early development phases of currently developed major economies, the author studies the path of economic activity concentration among regions. Using the measure of Theil Entropy, it is shown that economic activities tend to concentrate in the take-off phase, but this trend reverses when the economy becomes more mature. Moreover, a model is built to study the potential cause of economic concentration. The model argues that the gaps in institutional arrangements would lead to exaggerated imbalances in economic sizes between regions. This claim has gained some support from Chinese regional data since mid-1990s. The issue of regional income disparity is also studied with the same dataset. The author finds strong supports for the hypothesis discussed in Williamson (1965): namely, that regional inequality will follow an inverted-U shaped curve as the economy develops. Econometric analysis shows that, for the two issues above, China follows both paths until the current period; and is now standing at the crest of both inverted-U curves. It seems that China is now entering the opportunity window to alleviate both problems; or alternatively, China must alleviate the both problems if it wants to further develop.In sum, using cross country panel data over a long period of time, this thesis has overcome some common problems in previous comparative studies, which had omitted the takeoff phase of economic development. With the conclusion from comparative studies, we can better understand the spatial consequences of economic development in China.