Essays on the growth of Chinese cities
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The dissertation consists of two essays on several prominent impetuses that have fueled China's economic growth in the last two decades. The first essay examines the determinants of economic growth in Chinese cities, with special emphasis on the complementarity between foreign direct investment (FDI) and human capital. Using a panel dataset for 230 cities over the period 1991-2010, we find that the growth rates of GDP at the city level exhibit strong absolute convergence as well as conditional convergence. Consistent with the predictions of augmented Solow model, our results suggest that the growth rate of per capita GDP is negatively correlated with population growth and positively correlated with investment in physical capital and human capital. We find that FDI has a positive spillover effect on the growth rate and this effect is intensified by the human capital endowment of the city. The latter suggests that one way that human capital contributes to growth is as a facilitator for technology spillovers stemming from FDI. Furthermore, we find that the complementary effect of human capital and FDI tends to be stronger in Special Economic Zones (SEZ), open coastal cities, major cities, and cities with larger populations. We also find suggestive evidence that this complementary effect depends on the level of technology embedded in FDI. The second essay focuses on the large-scale rural-urban migration in China. Rural-urban migration in China has been intensely studied from various perspectives over the past two decades, primarily due to its inextricable link with China's ongoing urbanization process and its profound social ramifications. Although research has generated an impressive body of work on this subject, intraprovincial migrants, which constitute the bulk of the rural-urban migration, have received little attention in the literature. This paper aims to fill this gap by examining both inter- and intra-provincial rural migrants, paying close attention to the differences in their personal attributes and location choices. Utilizing a unique micro dataset based on a representative sample of rural migrants working in cities, I employ a nested logit approach to model a migrant's decision as first deciding whether to move within or out of his/her home province, and subsequently deciding which destination city to migrate to. I find that moving beyond one's home province has a strong deterrent effect on the probability of migration, analogous to the negative "border effect" identified in international migration studies. Consistent with some typical findings in the literature, migrant workers are drawn to the cities that offer higher wages, larger population sizes, faster employment growth, and higher standard of living. Furthermore, I find that people who have moved interprovincially differ significantly from intraprovincial migrants in a variety of individual characteristics. In general, young males with good health but less education are more likely to seek jobs out of their own provinces.