Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142599
Authors: 
Fu, Shihe
Hong, Junjie
Year of Publication: 
2010
Series/Report no.: 
EERI Research Paper Series 38/2010
Abstract: 
Whether urbanization economies stem from urban diversity or urban scale is not clear in the literature. This paper uses the 2004 China manufacturing census data and tests simultaneously the effects of urban size and industrial diversity on firm productivity, controlling for localization economies and human capital externalities. We find that productivity increases with city size—but at a diminishing rate, and the city size effect becomes negative for cities with population over two million. Firms also benefit from industrial diversity, and the strength of such benefit increases with city size but decreases with firm size. The characteristics of agglomeration economies in a transition economy are also discussed.
Subjects: 
Urbanization economies
Industrial diversity
Jacobs externalities
City size
JEL: 
L60
R12
R30
Document Type: 
Working Paper

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