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The effects of urban transformation on productivity spillovers in China

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  • He, Ming
  • Chen, Yang
  • van Marrewijk, Charles

Abstract

We analyze the impact of China's massive urban-transformation process on productivity spillovers for the east-coast electrical apparatus sector by combining the sub-prefecture-level population census data in 2000 and 2010 with detailed firm-level data from 1999 to 2007. At the sub-prefecture level, we identify three types of regions (metro-core, metro-ring, and non-metro) and develop three urban transformation measures (modernization, mobility, and disparity). A tailored spatial Durbin model enables us to distinguish between intra- and inter-regional technology spillovers. The baseline model reveals strong technology spillovers between neighboring firms, particularly those in close range. All three types of urban-transformation measures have significant impacts on technology spillovers. Modernization and mobility boost spillover effects, whereas economic disparity impedes inter-regional spillovers. Based on the structural difference between the three types of regions, our findings imply that metro-ring and non-metro regions are the major beneficiaries of productivity spillovers related to urban transformation.

Suggested Citation

  • He, Ming & Chen, Yang & van Marrewijk, Charles, 2021. "The effects of urban transformation on productivity spillovers in China," Economic Modelling, Elsevier, vol. 95(C), pages 473-488.
  • Handle: RePEc:eee:ecmode:v:95:y:2021:i:c:p:473-488
    DOI: 10.1016/j.econmod.2020.03.014
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