Urban Agglomeration: Theory And Evidence

With an effort to examine the causes and mechanisms behind the urban emergence and evolution, the paper constructs a new economic geography framework to study the urban agglomeration theory supporting with a lot of evidence from China, under which location and socio-spatial dialectic are adopted and the methodology combining mathematical models with empirical analysis is included. In the perspective of this paper, city is certain spatial space where people and economic activities agglomerating and its emergence and evolution may result from agglomeration effects of different externalities. When agglomeration forces dominate, agglomeration economies emerge because agglomeration returns exceed costs, and the city is in its development. While the dispersion forces dominate, agglomeration diseconomies emerge and the city will expand its geography scope to decrease agglomeration costs. The fast growth of agglomeration costs and its exceeding of certain limits will cause the city recession.From a whole region perspective, urban agglomeration may result from meanwhile result in regional unbalanced development. With the basis of new economic geography framework, the paper presents a mathematical model featuring of Thünen-Alonso model and core-periphery model, which provides a general explanation for the successive emergence of town, urban pole and megalopolis in urban agglomeration. Then the model is used to explain the internal relations in periods of regional disparity, urban configuration, economic structure and labor migration in China since 1978. There is also an indication in the model that it is the tension between centripetal forces and centrifugal forces that decides the urban spatial configuration and economic outcome.From a single city aspect, the paper examines both agglomeration ecnomies and diseconomies. Agglomeration economies include static and dynamic economies.Static agglomeration economies focus mainly on the sources and mechanisms of externalities that can be used to explain the emergence of cities and their different types. For the obvious differences of specialized and diversified cities in urban agglomeration, this part firstly explains different sources for urban agglomeration externalities by subdividing and extending pecuniary externality, technology externality and communication externality. Also in this part the agglomeration mechanisms including intermediate input, public goods and market place are examined and the reason for the specialized and diversified city co-existing is interpreted with different pecuniary and technology links. Then, in accordance with the situation in China,the specialization and diversification indexes for Chinese prefecture-level cities are calculated to analyze the differences of cities in different time and space. Using a panel data of 284 prefectures in China from 2003 to 2005, this part examines the factors affecting urban agglomeration economies and in which especially compares the relative contributions of specialization and diversification.The study of dynamic agglomeration economies focuses on what factors and mechanisms will hasten the economic growth of cities after their emergence. This part begins with the examination on the theoretical relations of urbanization, urban agglomeration and economic growth thus the less argument on the endogeneity in empirical analysis. In the study on the mechanisms, not only market mechanism but also non-market mechanism and spatial organization system are included. Finally, in the empirical analysis on China, the paper chooses productivity and employment density as agent varibles, with panel data composed of 209 prefectures from 1998 to 2005, to examine the factors promoting economy of a single city, especially the influence of urban agglomeration.Agglomeration diseconomies of a single city originate from the fast growth of agglomeration costs. With the basis of the study on agglomeration costs, the paper poses a new perspective for related polciy formulation. Those centripetal forces, no matter from market or non-market factors, all strongly show self-reinforcing features, which means the local government's policies on pure promotion of agglomeration returns are relatively limited under market economy environment. However if we take it into our consideration that urban agglomeration economies are net effects in which costs are excluded from returns, and economic agents are usually selfish but not self-restrained, local governments should strengthen the control of agglomeration costs. Therefore this paper investigates theories and experiences respectively of three types of main agglomeration: land costs, environment costs and social costs, and especially provides detailed panel data analysis of the relations between pollution and income level, pollution and population size. Correspondingly, the paper proposes three principles for city governance: smart growth arises in land use planning, sustainable development in environmental resources management and harmony in social relations adjustment.