Assessing the Merits of the Urban-Led Policy in China: Spread or Backwash Effect?

Abstract

Shanghai and Beijing, as two megacities, are often regarded as the most successful examples of China's growth pole policy, which has stirred up a great deal of controversy behind the spread-backwash effects. It is believed that the spread-backwash effects for these two mega metropolitan regions are particularly valuable when evaluating the merits of adopting an "urban-led" policy in China. Moreover, a great deal of effort has been devoted to the cross-section analysis of relevant data. What seems to be lacking, however, is a time-series econometric method. The estimation results using real gross regional product (GRP) over the last 50 years reveal that a long-run equilibrium exists for these central cities and their suburbs. More noteworthy is the finding that spread and backwash effects coexist in these two metropolitan regions, namely, the central city has spread and backwash effects on its medium-level and low-level suburbs, respectively. Thus, how to diminish the city-suburb gap is our concern and this argument is consistent with the spirit of new-type urbanization policy in China now to create a balanced and equalized metropolitan economy.

Determinan pertumbuhan ekonomi berkelanjutan wilayah induk dan pemekaran di kawasan timur Indonesia

“…Masalah yang biasanya timbul dari perbedaan pembangunan yang terjadi di daerah dinyatakan sebagai konvergensi dan divergensi (Kuncoro, 2013;Pratiwi & Kuncoro, 2016). Dalam hal ini, spread effect akan menyebabkan pemerataan pertumbuhan ekonomi antar wilayah (Chiang, 2018). Sementara itu, backwash effect akan menyebabkan divergensi dan menyebabkan ketidakmerataan pertumbuhan ekonomi serta cenderung mematikan perekonomian daerah di sekitar daerah inti.…”

Agglomeration in Tourism: The Case of SEZs in Regional Development Goals

“…This could cause problems given that workers from other provinces have lower costs of entering and working in NTB. Chiang (2018), Martin and Ottavianno (2001) have mentioned that the strong economic growth in the core region will cause migration, thereby increasing the competition in labour and reducing the ability to protect local labour. Since the gap of NTB's HDI level with the qualification standard of tourism human resources is quite high, therefore, externalities impact will potentially occur.…”

“…However, on another side, agglomeration also can produce a backwash effect where the rapid growth of industrial groups causes a monopoly, thus, shutting down the development of other areas around it (Parr, 2002;Cohen and Paul, 2009). Moreover, the strong economic growth in the core region will cause migration, thereby increasing the labour competition and reducing the ability to protect local labour (Chiang, 2018;Martin and Ottavianno, 2001).…”

The economic spillover of South Sumatera toward economic of Southern Sumatera Provinces in Indonesia

“…The process of economic growth of a region is closely related to the geographic position between one region and another. The hypothesis of spread-backwash effect by Myrdal (1957) against geographic events and the spread of economic growth contribute to the development of regional economic studies as it attempts to explain the effects of growth spreading from the economic aspects (Chiang, 2018;Samimi & Jenatabadi, 2014). The spread effect occurs when the growth of Gross Regional Domestic Product (GRDP) caused by the growth center has a positive coefficient meaning that the development of the region of growth center will increase the development of GRDP in hinterland area (Dholakia, 2009).…”

“…Positive influence on the development of the surrounding region is called the spread effect such as the opening of employment opportunities, the number of incoming investments, higher labor costs, and the population able to market the raw materials. Its negative effect is called backwash effect, like the emergence of regional imbalance (Chiang, 2018;Samimi & Jenatabadi, 2014). The imbalance of this region occurs because the flow of interaction between the hinterland regions to the central region of growth is greater than the interaction flow from the central region of growth to the hinterland region.…”