The Impact Of Network Power On China’s Urban Economic Growth

Along with the enhancement of transportation and communication technologies,the spatio-temporal distance between cities has been compressed obviously,and the flow range of elements such as capital,technology,information and labor force break through the restriction of traditional place space,cities can improve their economic performance through "experience sharing"," element flows","borrowed size" and "mutual collaboration" on a larger spatial scale.In the new context of a coexistence of "space of flows" and "space of places",urban network externalities have become an important complement of agglomeration economies,and the fate of cities has become increasing tied to their position in the network.This paper aims to gain a better understanding of network externalities through the lens of corporate networks in China.First,data on headquarter and branch locations of financial enterprises in China are subjected to the interlocking network model to approximate the urban network.Then,the distribution characteristic of the coupling coordination degree between network power and urban economic growth are analyzed.Finally,the impacts of network power on urban economic growth are quantitatively measured based on the panel data of 285 cities from 2003 to 2018.Three main findings are concluded.(1)From 2003-2018,the coupling coordination degree between network power and urban economic growth was ascending notably and exhibiting obviously spatial orientation and typological differentiation characteristics.(2)Network power has a significant positive effect on the urban economic growth,and this result is still robust after using instrumental variable estimation to mitigate endogeneity,replace the core explanatory variable and winsorize.The analysis results of control variables showed that cities with well-developed infrastructure,high level of human capital,industrialized industrial structure,advanced information technology facilities,abundant R&D capital investment and agglomeration economy can significantly contribute to the urban economic growth,while excessive government intervention can hinder the smooth operation of the market economy,and inhibit the development of urban economic growth.(3)The impact of network power on China’s urban economic growth is heterogeneous in three perspectives.Cities in the core block,eastern region or with large urban population scale profit more by the network competitive advantages,convenient traffic conditions and huge market hinterland,which improves the regional economic development level through network embedding.While cities in the peripheral block,central & western regions or with small urban population scale,being bounded by short of network competitiveness,traffic conditions and market scale,which inhibits the development of regional economy.In the network environment,the policy of urbanization in China needs to be adjusted accordingly.First,supporting cities to choose differentiated development paths in the financial network,and building a well-structured and functional-complementary national city system.Second,giving full play to the supply and guidance function of the financial network to urban economic growth,and realizing the positive interaction between financial network and urban network.Third,paying high attention to the multi-dimensional development gap between cities in the space of flows,and promoting social equity and regional economy coordinated development.