After more than 40 years’ opening-up and reform, China’s urbanization has entered a new type of urbanization. In order to reveal the rule of different infrastructure investments and urbanization relationships, this paper uses Shanghai as a case by applying econometric methods to study the detailed relationship between different indicators from 1990 to 2019. Firstly, we quantify that each variable has a long-term co-integration relationship with urbanization by co-integration test. And we found that the real estate is a main driving force of urbanization while the construction project investment plays an important role in promoting the urbanization rate in the studied period. Secondly, according to the Granger test, our study illustrates that each variable has a bilateral Granger relationship with urbanization while the urbanization rate has more Granger causality impact on the studied variables. Thirdly, based on impulse response test and variance decomposition analysis, we found that urbanization rate with other variables accounts for the majority of the percentage of impacts while the total investment in fixed assets and its three categories contribute a small amount to the urbanization rate. Finally, we propose policy suggestions to strengthen healthy urbanization development in Shanghai.
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