Urbanization, economic agglomeration and economic growth

Heliyon. 2023 Dec 17;10(1):e23772. doi: 10.1016/j.heliyon.2023.e23772. eCollection 2024 Jan 15.

Abstract

Are Chinese cities too agglomerated, and are production factors continuing to flow to cities?In recent years, research on this issue has attracted more and more attention from academics, for the research on this issue, academics generally believe that urbanization has a positive role in promoting economic growth, but whether urbanization will bring economic agglomeration and what is the role of economic agglomeration on the development of the economy? The research on this issue is still insufficient, therefore, Based on the panel data of 27 provinces from 2006 to 2020, it is generally believed that urbanization has a positive role in promoting economic growth. This paper adds economic agglomeration factors and uses a spatial econometric model to test the spillover effect of urbanization growth. The main conclusions are as follows: First, urbanization and economic agglomeration have a positive effect on economic growth, and there is a spatial spillover effect. Secondly, the advancement of urbanization is closely associated with economic growth, particularly in relation to the development of economic agglomeration. When economic agglomeration is based on a single-center model, it tends to impede urbanization and economic progress. In contrast, an economic agglomeration model with multiple centers has the potential to stimulate urbanization and further enhance economic growth. Thirdly, it is worth noting that the influence of urbanization on economic growth varies across different regions. Factors such as geographical location, resource availability, and local economic conditions contribute to this regional variation.

Keywords: Economic agglomeration; Economic growth; Nighttime lighting data; Spillover effect; Urbanization.