Investigating Causality Effect among Labor Productivity Growth and Industrialization, Urbanization, Globalization in China

Abstract

This study seeks to empirically test Granger-causality among China’s labor productivity (LBP) growth and industrialization (IND), urbanization (URB), globalization (GLB). It examines IND – the proportion of non-agricultural sectors to Gross Domestic Product (GDP), GLB – measured by foreign direct investment (FDI) and the total value of imports and exports (VIE), and URB – measured by the proportion of urban population. Data are taken from the published China national database. Unit root
and Johansen Cointegration tests are deployed to test the stationary and cointegration of the variables. The results reveal that LBP growth is determined by the level of IND, URB, and GLB.