Does geographical decentralisation harm the total factor productivity of firms in China?

Peng Ji and Lilin Yuan

Regional Studies, 2024, vol. 58, issue 3, 537-551

Abstract: Under dual market and policy forces, industries vacated central business districts in Chinese cities, showing a decentralised layout. Using Chinese industrial firms’ micro-data (2004–12), with township-level division as the unit, we describe urban industrial decentralisation and polycentric layout, exploring their impact on firms’ total factor productivity (TFP). We found that: (1) industrial decentralisation negatively impacted TFP during the early and middle stages of urbanisation; (2) the polycentric layout can alleviate the firms’ TFP losses caused by decentralisation; and (3) industrial decentralisation reduces diversified agglomeration, lowering TFP. The conclusions of this study provide policy recommendations for urban industrial spatial planning.

Date: 2024
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DOI: 10.1080/00343404.2023.2229374

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