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Productive Service Agglomeration, Human Capital Level, and Urban Economic Performance

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  • Du Peng

    (School of Economics, Shandong University of Technology, Zibo 255000, China)

  • Ehsan Elahi

    (School of Economics, Shandong University of Technology, Zibo 255000, China)

  • Zainab Khalid

    (School of Economics and Management, Southeast University, Nanjing 210096, China)

Abstract

This study aims to investigate the impact of productive service industry agglomeration on the economic performance of Chinese cities. The study analyzes data from 285 prefecture-level cities over a 16-year period (2003–2019) and develops a comprehensive urban economic index evaluation system based on three dimensions: social, economic, and resource and environmental benefits. The empirical analysis reveals that high-end productive service industry agglomeration has a significant positive relationship with urban economic performance (effect size of 0.012), whereas low-end productive service industry agglomeration does not. The study also finds that the impact of productive service industry agglomeration on economic performance varies across different regions and cities. Specifically, productive service industry agglomeration has a significant positive impact on the economic performance of cities in the eastern, central, northeastern, and western regions, with the impact being twice as much in the western region compared to the eastern region. Moreover, the effect of productive service industry agglomeration on the economic performance of non-resource-based cities is almost one-third more than that of resource-based cities. The study further reveals that human capital plays a mediating role in the relationship between productive service industry agglomeration and urban economic performance. Based on these findings, the study suggests that Chinese cities, particularly non-resource-based cities and those in the central and western regions, should focus on supporting high-end productive service industry agglomeration, improve the quality of productive service industry agglomeration, strengthen the matching between the accumulation of human capital and the development of productive service industry agglomeration, and tailor their strategies to promote the development of productive service industry agglomeration effectively to improve their economic performance.

Suggested Citation

  • Du Peng & Ehsan Elahi & Zainab Khalid, 2023. "Productive Service Agglomeration, Human Capital Level, and Urban Economic Performance," Sustainability, MDPI, vol. 15(9), pages 1-25, April.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:9:p:7051-:d:1130522
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    References listed on IDEAS

    as
    1. Elahi, Ehsan & Zhang, Hongxia & Lirong, Xing & Khalid, Zainab & Xu, Haiyun, 2021. "Understanding cognitive and socio-psychological factors determining farmers’ intentions to use improved grassland: Implications of land use policy for sustainable pasture production," Land Use Policy, Elsevier, vol. 102(C).
    2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    3. Elahi, Ehsan & Khalid, Zainab & Tauni, Muhammad Zubair & Zhang, Hongxia & Lirong, Xing, 2022. "Extreme weather events risk to crop-production and the adaptation of innovative management strategies to mitigate the risk: A retrospective survey of rural Punjab, Pakistan," Technovation, Elsevier, vol. 117(C).
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    6. Elahi, Ehsan & Khalid, Zainab & Zhang, Zhixin, 2022. "Understanding farmers’ intention and willingness to install renewable energy technology: A solution to reduce the environmental emissions of agriculture," Applied Energy, Elsevier, vol. 309(C).
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    2. Ge, Yuanqin & Xia, Yifan & Wang, Tongyu, 2024. "Digital economy, data resources and enterprise green technology innovation: Evidence from A-listed Chinese Firms," Resources Policy, Elsevier, vol. 92(C).

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