Shanxi Province Urbanization Construction And Economy Grow Relation Research

Urbanization has become not only an objective law but also an important source of socialeconomic development, as well as a major driving force for social progress and economic growth.Shanxi province is currently entering a crucial period of economic transition and development,therefore delving into the relationship between urbanization and economic growth of the provincewill help speed up economic transition and development, and promote the process of urbanization.In most of the developed areas, a relationship of positive interaction is shown between urbanizationand economic growth; then what about the relationship between urbanization and economic growthin Shanxi province?By means of summarizing relevant literatures about urbanization and economic growth, and onthe basis of analyzing the status of urbanization and economic development in Shanxi province, thispaper conducted empirical analysis on the relationship between the two from an econometricperspective according to the time series data in years1978-2009. The reslut of Grainger Causalityanalysis shows that urbanization cannot promote economic growth; but economic growth canstimulate the process of urbanization. Urbanization construction and economic growth in Shanxiprovince do not have a relationship of positive interaction. Through analyzing the status ofeconomic growth and the status of urbanization in Shanxi province, we can see that urbanization inShanxi province cannot significantly promote economic growth due to the following reason: Modeof economic development in Shanxi province is resource dependent and the industrial structure isunreasonable, therefore agglomeration effect of large towns is not brought into full play in theprocess of urbanization, and various factors of production cannot be reasonably and effectivelyallocated.