The E nigma of Under-urbanization: An Explanation Based on International Trade |
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Authors: | Ni Pengfei Yan Yingen Zhang Anquan |
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Institution: | 1. National Academy of Economic Strategy, CASS;2. Research Institute of Yellow River Civilization and Sustainable Development, Henan University;3. School of Economics, Southwestern University of Finance and Economics |
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Abstract: | To study the relationship between under-urbanization and international trade, we set up a model of the transfer of surplus rural labor in an open economy using 1995-2010 data from 40 countries and regions where industrialization was incomplete. Our findings indicate that if, in an open economy, there is a substantial labor surplus and in which domestic goods and services can be sold to foreign markets, there will be a significantly positive correlation between the net export ratio and the degree to which urbanization lags behind industrialization; countries or regions with higher marketization level, lower urban unemployment rate and poorer public health facilities are more likely to be under- urbanized; and an inverted U-shaped relationship exists between under-urbanization and per capita GDP. |
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Keywords: | surplus rural labor external demand industrialization under-urbanization |
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