Industrial Structure, City Size and Chinese Urban Productivity
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| Title | Industrial Structure, City Size and Chinese Urban Productivity
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| Author | Shanzi Ke and Yao Zhao |
| Organization | School of Economics and Trade, Hunan University |
| Email | shanzike@hnu.edu.cn,zyshine1987@163.com |
| Key Words | Industrial Structure, Linkage Effects, City Threshold Size, City Optimal Size, Structure-Size Synergy Effects |
| Abstract | This paper analyzes the synergy effects of industrial structure and city size on productivity of Chinese cities, and estimates the optimal size of cities for a given industrial structure and the marginal benefit of structural upgrading under a constraint of urban scale. The panel data regression estimates of 286 prefectural or higher level cities for the period of 2003-2008 show that the effects of industrial structure on urban per capita output depend on size of the cities, a city must surpass a threshold size in order to benefit from the home market effects which stem from the linkages of upstream-downstream industries. As the urban population size increases, urban productivity experiences an inverted-U shaped progress and the marginal benefit of urban growth increases as the industrial structure shifts from manufacturing to producer services. The estimation also shows that most cities in China are smaller than their optimal sizes. Therefore, small and medium sized cities should develop manufacturing and promote agglomeration, while developed large cities transition from manufacturing-oriented economies to service economies. |
| Serial Number | WP187 |
| Time | 2012-02-14 |
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