Why Asia and China have lower urban concentration and urban primacy

ABSTRACT

Asia is densely populated and home to most of the world's megacities. However, its urban primacy and urban concentration, especially those of developing Asia, are much lower than their counterparts in the rest of the world. This is an important puzzle that has not been addressed in the literature. Motivated by a theory of Krugman and Livas Elizondo, this paper attributes the lower urban concentration and urban primacy to higher levels of trade openness in Asia. Empirical evidences are provided using panel data from developing countries in Asia, from the rest of the developing world, and from China.

KEYWORDS:

• Trade Openness
• urban concentration
• urban primacy
• Asian developing countries
• China

JEL CLASSIFICATION:

• P25
• F14

Acknowledgments

Our thanks go to the anonymous reviewers for their valuable comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1. Urban primacy is defined as the share of the population in the biggest city to the national total urban population.

2. Urban concentration is defined as the share of population in cities with more than one million population to the national total urban population.

3. When computing the urban concentration and urban primacy, we drop those economies whose total population in 2014 is less than 1 million, and city states of Singapore, Monaco and Hong Kong.

4. Trade openness is measured by the ratio of the import and export to GDP.

5. The reason that why we employ developing panel countries outside of Asia and in Asia respectively to test the effect of trade openness on urban concentration and urban primacy is that, we want to show that the negative effect of trade openness not only applies to Asian developing economies, but also applies to those developing economies outside of Asia.

6. The same model specification is applied to regressions on urban primacy.

7. Variable ‘trade’ may suffer endogenous problem in these models. This issue is addressed in Section 3.5.

8. Variable ‘trade’ may suffer endogenous problem in these models. This issue is addressed in Section 3.5.

9. For continental countries, the rule for determining neighbor countries is having common borders; for an island country, we choose three to four countries that are nearest to the island country.

10. Results of robustness check can be available to readers upon request.

11. 1 USD = 6.69 CNY (20/07/2016).

12. Correlation index between them is −0.334.

13. Correlation coefficient between them is −0.72.

Additional information

Funding

Research for this paper was supported by Chinese National Natural Science Foundation [grant number 71133004], [grant number 71273057]; the “100 Talent Program” in Yunnan Province; Chinese Ministry of Education Project of Key Research Institute of Humanities and Social Sciences at Universities [grant number 14JJD790017]; the Chinese National Social Science Fund [grant number 11&ZD037].

Notes on contributors

Guanghua Wan

Guanghua Wan is a director of research, Asian Development Bank Institute, Tokyo, Japan. His research interests are poverty, inequality and economic development. He has recently published articles on structural change and income distribution in China and on the growth and distributive impacts on infrastructure investment in China.

Dan Yang

Dan Yang is an associate professor, College of Economics and Management, Southwest University, Chongqing, PRC.

Yuan Zhang

Yuan Zhang is a professor, China Center for Economic Studies, Fudan University, Shanghai, PRC, and Fudan-Guangxi Research Institute of Maritime Silk Road and Regional Development of Guangxi, Guangxi University of Finance and Economics, Nanning, PRC.