Urban-Industrial Development and Regional Economic Growth in a Developing Country: A Spatial Econometric Approach

Abstract

This paper explored the effects of urbanization and industrial structure change in contemporary China using the data of 26 cities in the Yangtze River Delta (YRD) between 2006 and 2017. We analyzed the spatial characteristics of the regional economic growth by calculating the Global Moran's I and the Local Moran's I. We investigated the relationship between urbanization, industrial structure upgrade, and economic growth through a spatial econometric approach and tested the panel thresholds. Our findings included: (I) spatial autocorrelation is an important driver of urbanization and industrial structure upgrade; (2) the upgrade of the industrial structure leads to a structural economic deceleration which slows down the regional economic growth in the YRD; however, the positive effect of industrial structure upgrade on the regional economic growth still exists; (3) a synergy effect of New-type Urbanization and industrial structural upgrade positively affects the economic growth in the YRD; (4) the empirical results indicate that only when urbanization and industrial structural upgrade develop coordinately, will they play better roles in promoting the economic growth.