How the Population Inflow Influence Guangdong's Economy and Mechanism Study

Abstract

This study observed the relationship and predictability of population inflow, industrial development, and per capita wage in Guangdong Province from 1998 to 2020. Firstly, the research makes the variables stable, establishes the VAR model, and tests the stability of the model. And then the research uses the Granger causality test to evaluate the relationship among population inflow, per capita wage, and GDP. It shows that under the 5% confidence level, on the one hand, per capita wage has a significant impact on the gross industrial value, and the gross industrial value has a significant impact on population inflow. On the other hand, per capita wage and population inflow have a direct impact on each other. The results of impulse response function and variance decomposition analysis show that the rise of wages will promote industrial development, and the total industrial value will lead to the rise of population inflow, but the impact is not significant over time. Wages have a direct impact on population mobility and population mobility fluctuates greatly over time. The results show that per capita wage, gross industrial value, and population inflow play a significant role in promoting each other and forming a positive cycle. Promoting population inflow will help greatly promote prosperous economic development.