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2021•Unpublished venueRequires access

Agglomeration Effect and Economic Growth in Urban System

Qi Wang, Yuan-Jun Ge, Fa-Hsiang Chang

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Abstract

This paper presents an empirical analysis of the effects of agglomeration on the economic growth of 145 Chinese cities in nine major urban systems. The results show that industrial diversification externalities have a positive effect on the cities’ relative economic growth in the urban system. By applying the gravity model, this paper also finds the spatial interaction intensity within the same urban system plays a positive role in enhancing the total factor productivity (TFP) of the city from 2003 to 2009, but this effect gradually weakens from 2010 to 2016.

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What this paper is about

This paper presents an empirical analysis of the effects of agglomeration on the economic growth of 145 Chinese cities in nine major urban systems. The results show that industrial diversification externalities have a positive effect on the cities’ relative economic growth in the urban system. By applying the gravity model, this paper also finds the spatial interaction intensity within the same urban system plays a positive role in enhancing the total factor productivity (TFP) of the city from 2003 to 2009, but this effect gradually weakens from 2010 to 2016.

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Available abstract

This paper presents an empirical analysis of the effects of agglomeration on the economic growth of 145 Chinese cities in nine major urban systems. The results show that industrial diversification externalities have a positive effect on the cities’ relative economic growth in the urban system. By applying the gravity model, this paper also finds the spatial interaction intensity within the same urban system plays a positive role in enhancing the total factor productivity (TFP) of the city from 2003 to 2009, but this effect gradually weakens from 2010 to 2016.

Key concepts: Economies of agglomeration, Externality, Economic geography, Diversification (marketing strategy), Total factor productivity, Urban agglomeration, Economics, Productivity

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