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Research Seminars & Workshops @ IRES

Prof Wu Jianfeng
China Center for Economic Studies (CCES), Fudan University

Do bigger cities contribute to economic growth in surrounding areas?
Evidence from county-level data in China


9 February 2012, Thursday


3.00pm - 5.00pm


Seminar Room 7, SDE3 Level 3


This paper focuses on the role of city interaction in influencing local economic growth using county-level data in China. According to literature on urban and regional economics, the impacts of a high-tier city on its surrounding areas depend on the interaction of growth spillover effect and agglomeration shadow effect. The empirical evidence in this paper illustrates that higher-tier cities have positive effects on economic growth for nearby counties, suggesting the dominant growth spillover effect over agglomeration shadow effect. This analysis also reveals the negative effect of institutional barriers associated with spatial deprivation and local protectionism on the interrelationship between a higher-tiered city and its neighboring counties. The positive effect of a higher-tiered city on economic growth for the surrounding county under its jurisdiction is found to be weaker, providing empirical evidence of spatial deprivation. On the other hand, the positive link between higher-tiered city and the county nearby is found to be thinner as they belong to different provinces. This finding is consistent with local protectionism argument.

Keywords: Spatial Interaction, Growth Spillover Effect, Agglomeration Shadow Effect, Local Protectionism, Spatial Deprivation

For full paper, download here/images/icon/pdf-icon.gif

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