Sustainable Urbanization and Economic Growth in Developing Countries : A Panel Data Study

In view of the constructive role played by urbanization and infrastructure, the present paper aims to empirically investigate the relationship between urbanization, infrastructure, and economic growth. The paper examines this relationship for annual panel dataset of developing countries, viz., Brazil, Russia, India, China, South Africa, Afghanistan, Pakistan, Bangladesh, Nepal, Bhutan, and Sri Lanka, for the period 2008-2016. This is the only study analyzing the impact of urban primacy on economic growth for developing countries. The study has applied panel Ordinary Least Square (OLS) and two-step system Generalized Method of Moments (GMM) techniques. The results indicate that in general, per capita income, urban primacy growth, broadband, and female education favorably impact economic growth. A key finding of the study is that in the long run, per capita income level has a positive relationship with economic growth. The study concludes that urban infrastructure’s favorable role in economic growth, in turn, leads to realization of ‘agglomeration economics’ and controls congestion cost. Based on the results, the paper also provides broad policyimplications