Business Intelligence

Searching For The Parallel Growth Of Cities

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Executive Summary

Three urban growth theories predict parallel growth of cities. The endogenous growth theory predicts deterministic parallel growth; the random growth theory implies that city growth follows Gibrat's law with a steady-state distribution; and the hybrid growth theory suggests the co-movement of random city growth. This paper uses the Chinese city size data from 1984-2006 and time series econometric techniques to test for parallel growth. The results from various types of stationarity tests on pooled heterogeneous cities show that city growth is random. However, once growth trend and structural change are taken into account, certain groups of cities with common group characteristics, such as similar natural resource endowment or policy regime, grow parallel.

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