Testing Urbanization Economies in Manufacturing Industries: Urban Diversity or Urban Size?

Shihe Fu () and Junjie Hong

EERI Research Paper Series from Economics and Econometrics Research Institute (EERI), Brussels

Abstract: Whether urbanization economies stem from urban diversity or urban scale is not clear in the literature. This paper uses the 2004 China manufacturing census data and tests simultaneously the effects of urban size and industrial diversity on firm productivity, controlling for localization economies and human capital externalities. We find that productivity increases with city size—but at a diminishing rate, and the city size effect becomes negative for cities with population over two million. Firms also benefit from industrial diversity, and the strength of such benefit increases with city size but decreases with firm size. The characteristics of agglomeration economies in a transition economy are also discussed.

Keywords: Urbanization economies; Industrial diversity; Jacobs externalities; City size. (search for similar items in EconPapers)
JEL-codes: L60 R12 R30 (search for similar items in EconPapers)
Date: 2010-10-18
New Economics Papers: this item is included in nep-geo, nep-tra and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://www.eeri.eu/documents/wp/EERI_RP_2010_38.pdf (application/pdf)

Related works:
Journal Article: TESTING URBANIZATION ECONOMIES IN MANUFACTURING INDUSTRIES: URBAN DIVERSITY OR URBAN SIZE? (2011)
Working Paper: Testing urbanization economies in manufacturing industries: urban diversity or urban size? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eei:rpaper:eeri_rp_2010_38

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