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Urban Productivity in China

Author

Listed:
  • Zuohong Pan

    (Department of Social Sciences, Western Connecticut State University, Danbury, CT 06810, USA, panz@wcsuedu)

  • Fan Zhang

    (Flushing, New York, USA, zhangfan_2001@yahoo.com)

Abstract

In this empirical study, we test the relationship of Chinese urban productivity and city size. Using over 119 790 firm-level production data cross 28 industries from the Third National Industrial Survey, along with the urban population data of 224 cities, we find strong and prevailing significant agglomeration economies in Chinese urban areas. The estimated average agglomeration elasticity is around 0.051, implying that every doubling of city size will provide a 3.6 per cent gain in firm productivity. The breakdown analysis suggests that, based on current data, the major source of the agglomeration advantage comes from localisation economies-benefits from the concentration of firms of the same industry within one geographical area-rather than urbanisation economies-externalities from urban development itself. The maximum size study also suggests that, while most Chinese cities have yet to grow to demonstrate the full strength of agglomeration economies, many Chinese industries have reached the 'optimal' industry size within a 'given' urban area.

Suggested Citation

  • Zuohong Pan & Fan Zhang, 2002. "Urban Productivity in China," Urban Studies, Urban Studies Journal Limited, vol. 39(12), pages 2267-2281, November.
    • Handle: RePEc:sae:urbstu:v:39:y:2002:i:12:p:2267-2281
    DOI: 10.1080/0042098022000033863
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    References listed on IDEAS

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    Cited by:

    1. Canfei He & Qi Guo & David Rigby, 2015. "Industry Relatedness, Agglomeration Externalities and Firm Survival in China," Papers in Evolutionary Economic Geography (PEEG) 1528, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2015.
    2. Lu, Jiangyong & Tao, Zhigang, 2009. "Trends and determinants of China's industrial agglomeration," Journal of Urban Economics, Elsevier, vol. 65(2), pages 167-180, March.
    3. Chang, Gene Hsin & Brada, Josef C., 2006. "The paradox of China's growing under-urbanization," Economic Systems, Elsevier, vol. 30(1), pages 24-40, March.
    4. Chauvin, Juan Pablo & Glaeser, Edward & Ma, Yueran & Tobio, Kristina, 2017. "What is different about urbanization in rich and poor countries? Cities in Brazil, China, India and the United States," Journal of Urban Economics, Elsevier, vol. 98(C), pages 17-49.
    5. Can-fei He & Sheng-jun Zhu, 2009. "Industrial agglomeration and labour productivity in transition: an empirical study of Chinese manufacturing industries," Post-Communist Economies, Taylor & Francis Journals, vol. 21(1), pages 103-115.

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