Urban Agglometation And Spillover Effects In China:Theory And Evidence

In the process of re-shaping China's regional economic map, econimicconcentration in cities and urban agglomerations is inevitable. Research on the urbaneconomic concentration and spillover effects have occupied the interest of researchersand policy makers, the core issue is nothing more than the following: Firstly, at thenational level, what is the reasonable regional econimic layout? Production factorsshould concentrate along the coast or concentrate in major urban agglomerationsaround the country? How geographical distances can influence the splliover effectsbetween the cities and define the spatial extent of cities and urban agglomerations?Secondly, at the regional level, population and resources should continue toconcentrate in the single core city of the urban agglomeration or spread over inmultiple cities of the urban agglomeration? Is one particular type of spatial structuremore efficient than the others? Whether the optimal spatial structure depends on thesize of urban agglomerations? Thirdly, what is the reasonable industrial structure?How to promote urban economic agglomeration through the adjustment of industrialstructure? Fourthly, as the major component of public investment, to what extent doeducation,health,transportation and communication infrastruction impact on urbanagglomeration and inter-regional spillovers? How to arrange the longitudinalexpenditure responsibilities between local and central governments? Obviously,replying the above questions would provide useful inspiration for the selection andarrangement of the current regional economic policy. So we focus on the abovequestions. The dissertation consists eight chapters,and eaeh chapter is organized asfollows:Chapter One is introduction,mainly introducing the background, the definitionof agglomeration and spillover, approach, structure, the main innovation and shortageof this paper.Chapter Two reviews the theoretical literatures concerning economicconcentration, these theory including the classical location theory, the classical tradetheory, the neo-classical economics, the growth pole theory, the new trade theory andnew economic geography. Then we explain spatial panel econometrics that are used inthis paper.Chapter Three explores the relationship between geographic distance,agglomeration economics and urban labor productivity based on urban panel datasfrom 2003 to 2009. The findings provide a remarkable confirmation of capital stockper worker,economic density,specialization of economics contributing to the laborproductivity differences among cities.The results also suggest that there is spatialcorrelation and the spillovers between cities are the strongest within 170 km and existonly for a distance up to 280km, quite limited in geographic scope. Then we move tothe relationship between geographic distance and the urban employhment spillovereffects. Empirical evidence shows that the strength of urban spillover effects do notstrictly decay over distance, but exhibit an inverted U shaped curve in which theturning point is 50km. We also find that spillovers between cities are the strongestwithin 180 km and decline rapidly above 200km, quite limited in geographic scope. Additional results show that investment in science and echnology, industrial structureadjustment, and the level of financial and public service are important for theevolution of city size distribution.Chapter Four investigates how different spatial structures, especially themonocentricity and polycentricity dimension, affect the economic performance ofChinese urban agglomerations based on urban agglomeration panel datas from 2000to 2009. The results indicate that Monocentricity is associated with higher total factorproductivity and this correlation is particularly strong in smaller urban agglomerations.In this sense, Chinese urban system in general shows a flat-forming tendency, leadingto significant efficiency losses. Therefore, further increasing the size of the core city isimportant for urban agglomeration's sustainable development.Chapter Five analyzes the relationship between industrial structure variation andthe urban employment based on an urban panel datas.Our results indicate that thestrength of industrial structure variation especially the incremental structureadjustment will bring significant positive impact on employment growth., while theintra-city industry reallocations exhibit a significant negative effect on localemployment growth. Our evidence also suggests that a large employment share ofagriculture,Personal Services and Producer Services are associated with loweremployment growth.Chapter Six probes the relationship between infrastructure and total factorproductivity based on urban panel datas from 2003 to 2009. The findings provide afairly remarkable confirmation of the role of human capital,public health,transportinfrastructure and information infrastructure contributing to the local total factorproductivity differences among cities and add an important spatial dimension byshowing that the geographical spillover effects of public health and informationinfrastructure have a significantly positive impact.Chapter Seven measures local industrial efficiency of environmental technologyin Jilin Province based on DEA approach. We also explore the factors influencing theefficiency by the use of Tobit model. The study finds that:Firstly, industrial efficiencyof environmental technology is highly unbalanced. Secondly, it is clear thatagglomeration economies, investment of technology have a forward influence on theefficiency of environmental technology while capital-labor ratio and governmentinfluence have a negative significant effect on the efficiency. Then the dissertationmeasures and tests the extent of localization of Guangdong province's thirty two-digitmanufacturing industries based on a dartboard framework. The results indicate thatthe overall agglomeration degree of Guangdong's manufacturing industry is quitehigh, 80% of them are localized at a 1% confidence level. Besides, Guangdong'sindustrial agglomeration degree has continuously risen from 1995 but experienced adrop from 2007. It is also indicated that only 86 of the 207 industries with locationquotient above the unity pass the test and localization mostly takes place in the PearlRiver Delta region.Chapter Eight is the conclusion and policy implications.