Productivity growth in Chinese cities: The agglomeration effect for cross-regional industrial structures

Yuanjun Ge and Fa-Hsiang Chang
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Yuanjun Ge: Wenzhou-Kean University, China
Fa-Hsiang Chang: Wenzhou-Kean University, China

Theoretical and Applied Economics, 2021, vol. XXVIII, issue 4(629), Winter, 91-104

Abstract: Since industrial development patterns in China are different across regions and sectors, this paper firstly estimates total factor productivity growth rate through two-stage-least-square method and then investigates the effect of agglomeration in city-industry productivity growth for 7 sectors located in 101 Chinese cities over period 2005-2013, with consideration of cross-regional effect such as knowledge spillovers between regions. Our results indicate there is no significant effect of agglomeration on city-industry TFP if the impact of cross-regional effect on agglomeration are taken into considerations. From spatial Durbin model (SDM), cross-regional effect significantly inhibits the city-industry TFP growth resulted from diversification.

Keywords: China; TFP growth; Knowledge Spillovers; agglomeration externalities; spatial Durbin model. (search for similar items in EconPapers)
Date: 2021
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