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Inter-City Spillover and Intra-City Agglomeration Effects among Local Labour Markets in China

Author

Listed:
  • Gong, Xiaodong

    () (NATSEM, University of Canberra)

  • Gao, Jiti

    () (Monash University)

  • Liang, Xuan

    () (Australian National University)

Abstract

We examine how city size affect wage levels of cities (agglomeration externality) and how it influence surrounding cities (spill-over effect) in China for the period between 1995 and 2009. Using spatial fixed-effect panel data models and allowing for endogenous and exogenous spatial dependence, we find strong positive city size effect on real wage levels, which confirms the existence of agglomeration economy within cities. We also find significant differences in both the direct and indirect effect of factors such as FDI between more and less population dense areas.

Suggested Citation

  • Gong, Xiaodong & Gao, Jiti & Liang, Xuan, 2019. "Inter-City Spillover and Intra-City Agglomeration Effects among Local Labour Markets in China," IZA Discussion Papers 12329, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp12329
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    References listed on IDEAS

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    More about this item

    Keywords

    agglomeration economy; spill-over; spatial econometrics; fixed-effects;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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