IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i19p14545-d1254814.html
   My bibliography  Save this article

Does the Digital Economy Promote Industrial Collaboration and Agglomeration? Evidence from 286 Cities in China

Author

Listed:
  • Senhua Huang

    (Department of Economics, School of Business, Hunan University of Science and Technology, Xiangtan 411201, China
    Department of International Economics and Trade, School of Economics and Management, Shaoyang University, Shaoyang 422000, China)

  • Wenzhong Ye

    (Department of Economics, School of Business, Hunan University of Science and Technology, Xiangtan 411201, China)

  • Feng Han

    (Department of Economics, School of Economics, Nanjing Audit University, Nanjing 211815, China)

Abstract

Relying on high penetration and strong diffusion capabilities, the digital economy is becoming a new driving force for industrial integration and development. It is of great significance to promote the coordinated development of manufacturing and producer services. This paper took panel data on 286 prefecture-level cities and above in China from 2011 to 2019 as its research object, and used the two-way fixed effect model, threshold effect model, and the Spatial Durbin Model (SDM) as its econometric testing methods. This analysis explored the impact of the digital economy on the synergetic agglomeration between manufacturing and productive service industries in China. The results of the research showed that the synergetic agglomeration of industries is significantly promoted by the digital economy. This conclusion was still valid after an endogeneity test was carried out. The digital economy’s role was found to mainly involve promoting knowledge spillovers and expanding the market size. An in-depth analysis of the digital economy has enabled the collaborative agglomeration of manufacturing and producer services in large, medium-sized, and small cities. The digital economy had the greatest effect on small cities, followed by medium-sized cities and large cities. The synergetic aggregation between the manufacturing and high-end producer services industries is significantly promoted by the digital economy. However, it was not found to have had a significant effect on the synergetic agglomeration between the manufacturing and low-end producer services industries. The impact of the digital economy on industrial collaborative agglomeration is nonlinear. Only when the level of the digital economy exceeds the threshold can the promoting effect of the digital economy on industrial collaborative agglomeration be manifested. In summary, the development of the digital economy was found to have promoted industrial collaboration and agglomeration in the study areas and their neighboring regions in the study period. The research results of this article are of great significance for achieving the goal of the “two-wheel drive” of the manufacturing and producer services industries, as well as high-quality economic development in China.

Suggested Citation

  • Senhua Huang & Wenzhong Ye & Feng Han, 2023. "Does the Digital Economy Promote Industrial Collaboration and Agglomeration? Evidence from 286 Cities in China," Sustainability, MDPI, vol. 15(19), pages 1-24, October.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:19:p:14545-:d:1254814
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/19/14545/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/15/19/14545/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Senhua Huang & Feng Han & Lingming Chen, 2023. "Can the Digital Economy Promote the Upgrading of Urban Environmental Quality?," IJERPH, MDPI, vol. 20(3), pages 1-21, January.
    2. Tianling Zhang & Panda Su & Hongbing Deng, 2021. "Does the Agglomeration of Producer Services and the Market Entry of Enterprises Promote Carbon Reduction? An Empirical Analysis of the Yangtze River Economic Belt," Sustainability, MDPI, vol. 13(24), pages 1-21, December.
    3. Qunyong Wang, 2015. "Fixed-effect panel threshold model using Stata," Stata Journal, StataCorp LP, vol. 15(1), pages 121-134, March.
    4. Philippe Martin & Gianmarco I.P. Ottaviano, 2021. "Growing locations: Industry location in a model of endogenous growth," World Scientific Book Chapters, in: Firms and Workers in a Globalized World Larger Markets, Tougher Competition, chapter 1, pages 3-24, World Scientific Publishing Co. Pte. Ltd..
    5. Juan Lin & Zhou Yu & Yehua Dennis Wei & Mingfeng Wang, 2017. "Internet Access, Spillover and Regional Development in China," Sustainability, MDPI, vol. 9(6), pages 1-18, June.
    6. Qingling Liu & Xiaoxiao Yang & Zhiyang Shen & Dalia Štreimikienė, 2022. "Digital economy and substantial green innovation: empirical evidence from Chinese listed companies," Post-Print hal-03974905, HAL.
    7. Sa Xu & Cunyi Yang & Zhehao Huang & Pierre Failler, 2022. "Interaction between Digital Economy and Environmental Pollution: New Evidence from a Spatial Perspective," IJERPH, MDPI, vol. 19(9), pages 1-23, April.
    8. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    9. Peter J. Taylor & Ben Derudder & James Faulconbridge & Michael Hoyler & Pengfei Ni, 2014. "Advanced Producer Service Firms as Strategic Networks, Global Cities as Strategic Places," Economic Geography, Clark University, vol. 90(3), pages 267-291, July.
    10. repec:hal:spmain:info:hdl:2441/10192 is not listed on IDEAS
    11. Venables, Anthony J, 1996. "Equilibrium Locations of Vertically Linked Industries," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 37(2), pages 341-359, May.
    12. Rongrong Zhou & Decai Tang & Dan Da & Wenya Chen & Lin Kong & Valentina Boamah, 2022. "Research on China’s Manufacturing Industry Moving towards the Middle and High-End of the GVC Driven by Digital Economy," Sustainability, MDPI, vol. 14(13), pages 1-30, June.
    13. Joseph F. Francois, 1990. "Trade in Producer Services and Returns Due to Specialization under Monopolistic Competition," Canadian Journal of Economics, Canadian Economics Association, vol. 23(1), pages 109-124, February.
    14. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Investment in the European Union," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 959-972, November.
    15. Hansen, Bruce E., 1999. "Threshold effects in non-dynamic panels: Estimation, testing, and inference," Journal of Econometrics, Elsevier, vol. 93(2), pages 345-368, December.
    16. Lu-Hui Gao & Guo-Qing Wang & Jing Zhang & Muhammad Javaid, 2021. "Industrial Agglomeration Analysis Based on Spatial Durbin Model: Evidence from Beijing-Tianjin-Hebei Economic Circle in China," Complexity, Hindawi, vol. 2021, pages 1-10, July.
    17. repec:hal:wpspec:info:hdl:2441/10192 is not listed on IDEAS
    18. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Firms in the European Union," Post-Print hal-01020551, HAL.
    19. Keith Head & Thierry Mayer, 2004. "Market Potential and the Location of Japanese Firms in the European Union," Post-Print hal-01020551, HAL.
    20. Shuaitao Jiao & Qiubi Sun, 2021. "Digital Economic Development and Its Impact on Econimic Growth in China: Research Based on the Prespective of Sustainability," Sustainability, MDPI, vol. 13(18), pages 1-19, September.
    21. Avom, Désiré & Nkengfack, Hilaire & Fotio, Hervé Kaffo & Totouom, Armand, 2020. "ICT and environmental quality in Sub-Saharan Africa: Effects and transmission channels," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    22. Peter J. Taylor & Ben Derudder & James Faulconbridge & Michael Hoyler & Pengfei Ni, 2014. "Advanced Producer Service Firms as Strategic Networks, Global Cities as Strategic Places," Economic Geography, Taylor & Francis Journals, vol. 90(3), pages 267-291, July.
    23. Xiaowen Wang & Yunsheng Zhang & Nanxu Chen, 2022. "Modern service industry agglomeration and its influencing factors: spatial interaction in Chinese cities," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 3880-3899, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Shan Feng & Shuguang Liu, 2023. "Does AI Application Matter in Promoting Carbon Productivity? Fresh Evidence from 30 Provinces in China," Sustainability, MDPI, vol. 15(23), pages 1-19, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vincent Delbecque, 2008. "Tax Competition and Foreign Direct Investment: assessing the role of market potential and trade costs in a "Footloose Capital" framework," Working Papers hal-04140741, HAL.
    2. Bagoulla, Corinne & Péridy, Nicolas, 2011. "Market access and the other determinants of North–South manufacturing location choice: An application to the Euro-Mediterranean area," Economic Systems, Elsevier, vol. 35(4), pages 537-561.
    3. Andrea Gauselmann & Philipp Marek, 2012. "Regional determinants of MNE’s location choice in post-transition economies," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(4), pages 487-511, November.
    4. Suminori Tokunaga & Maria Ikegawa, 2019. "Global supply chain, vertical and horizontal agglomerations, and location of final and intermediate goods production sites for Japanese MNFs in East Asia: evidence from the Japanese Electronics and Au," Asia-Pacific Journal of Regional Science, Springer, vol. 3(3), pages 911-953, October.
    5. Kim, Ho Yeon, 2012. "Shrinking population and the urban hierarchy," IDE Discussion Papers 360, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    6. Frances Ruane & Xiaoheng Zhang, 2007. "Where do MNEs Expand Production: Location Choices of the Pharmaceutical Industry in Europe after 1992," Papers WP211, Economic and Social Research Institute (ESRI).
    7. Alfaro, Laura & Chen, Maggie Xiaoyang, 2014. "The global agglomeration of multinational firms," Journal of International Economics, Elsevier, vol. 94(2), pages 263-276.
    8. Lall,Somik V. & Gun Wang, Hyoung & Deichmann, Uwe, 2010. "Infrastructure and City Competitiveness in India," WIDER Working Paper Series 022, World Institute for Development Economic Research (UNU-WIDER).
    9. José M. Gaspar, 2018. "A prospective review on New Economic Geography," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 61(2), pages 237-272, September.
    10. Nielsen, Bo Bernhard & Asmussen, Christian Geisler & Weatherall, Cecilie Dohlmann, 2017. "The location choice of foreign direct investments: Empirical evidence and methodological challenges," Journal of World Business, Elsevier, vol. 52(1), pages 62-82.
    11. Frances Ruane & Xiaoheng Zhang, 2007. "Location Choices of the Pharmaceutical Industry in Europe after 1992," The Institute for International Integration Studies Discussion Paper Series iiisdp220, IIIS.
    12. Andrea Gauselmann & Philipp Marek, 2011. "Regional Determinants of MNE's Location Choice in Transition Economies," WIFO Working Papers 412, WIFO.
    13. Keith Head & Thierry Mayer, 2011. "Gravity, market potential and development," SciencePo Working papers Main hal-01024209, HAL.
    14. Gauselmann, Andrea & Marek, Philipp & Angenendt, Jan Philipp, 2011. "MNE’s Regional Location Choice - A Comparative Perspective on East Germany, the Czech Republic and Poland," IWH Discussion Papers 8/2011, Halle Institute for Economic Research (IWH).
    15. Ho Yeon KIM & Petra de Jong & Jan Rouwendal & Aleid Brouwer, 2012. "Shrinking population and the urban hierarchy [Housing preferences and attribute importance among Dutch older adults: a conjoint choice experiment]," ERSA conference papers ersa12p350, European Regional Science Association.
    16. Tuochen Li & Dongri Han & Shaosong Feng & Lei Liang, 2019. "Can Industrial Co-Agglomeration between Producer Services and Manufacturing Reduce Carbon Intensity in China?," Sustainability, MDPI, vol. 11(15), pages 1-15, July.
    17. Siedschlag, Iulia & Zhang, Xiaoheng & Smith, Donal, 2009. "What Determines the Location Choice of Multinational Firms in the ICT Sector?," Papers WP336, Economic and Social Research Institute (ESRI).
    18. H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
    19. Siedschlag, Iulia & Zhang, Xiaoheng & Smith, Donal, 2009. "What Determines the Attractiveness of EU Regions to the Location of Multinational Firms in the ICT Sector?," Papers DYNREG45, Economic and Social Research Institute (ESRI).
    20. repec:hal:spmain:info:hdl:2441/c8dmi8nm4pdjkuc9g8mb6c01j is not listed on IDEAS
    21. Yiming Zhou, 2019. "Home market effect, land rent, and welfare," Asia-Pacific Journal of Regional Science, Springer, vol. 3(2), pages 561-580, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:19:p:14545-:d:1254814. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.