A Study on the Economic Effects of Provincial Capital Bias and the Adjustment of Urban Development Strategy in China

Abstract

Provincial capital has a significant status and influence on the development of regional economy as a focus of a province in China. This paper finds that the provincial capital bias, which is the ratio of a capital city’s population in a province’s population, embodies an increasing tendency in the migration of population using a panel data of 19 provinces from 2000 to 2016. Based on a theoretical analysis, this paper constructs regression models and studies the economic effects of provincial capital bias from 3 aspects. The results show: provincial capital bias promotes the growth of provincial economy significantly; provincial capital bias has no impact on the provincial income inequality; provincial capital bias provides a significant spread effect to surrounding regions. Therefore, China should adjust its urban development strategy to promote the population to further gather into the provincial capital cities.