Research On The Impact Of Urban Network On Economic Performance From The Perspective Of Investment Linkag

The development of any economic activity must be carried out in a certain space,and the study of economic activities from a spatial perspective is the fundamental difference between regional economics and other economics disciplines.Traditional economic theories regard space as homogeneous,and ignore the important role of space factors in economic growth for a long time.The new economic geography theory uses the iceberg cost hypothesis to incorporate spatial factors into the analytical framework of general equilibrium theory,interprets the spatial location theory of traditional production with the analytical framework of mainstream economics,and reveals the inherent operating mechanism of agglomeration economy.However,in the traditional agglomeration theory,transportation costs and economies of scale are the main forces shaping urban functions and spatial organization,which cannot explain the phenomenon that small cities have faster economic growth and higher productivity than large cities in reality.The proposal of network externality theory solves this contradiction.In a networked city,urban development is no longer entirely determined by its own size,but mainly by the strength of its interconnectedness with other cities and its position in the urban network.Compared with agglomeration externalities,urban network externalities have significant characteristics such as cross-border,mobility,multi-scale,and sharing.In this flattened urban system,small and medium-sized cities can transcend geographic distances and hierarchies of urban scale,and directly enjoy the benefits brought by the development of large cities through network connections.In fact,we can also find that with the development of transportation,information and communication technologies,the constraining effect of space-time distance on economic activities gradually declines.Inter-city interaction in the form of the flow of population,capital,information,and technology has been strengthened.The evolution pattern of urban space is changing from a static place space to a dynamic flow space,and the spatial form also showing a change from a single-center city to a polycentric urban agglomerations.It can be seen that,whether based on theoretical evolution or practical development,the trend of urban network is profoundly affecting and reconstructing global and regional urban systems.Against this backdrop,we cannot help but wonder,what advantages does the urban network have in driving economic growth? What is the source of its advantages and its mechanism? For these questions,we have not been able to obtain ready-made answers from existing research,and need to seek new explanations,which constitutes the research motivation of this paper.According to the theory of urban network,this paper will use the data of cross-regional mutual investment of enterprises registered for industry and commerce in China to construct a Chinese urban network.On the basis of visual display and spatial characteristic analysis of the urban network,we will focus on theoretical and empirical analysis on the impact of urban network on economic performance.In terms of theoretical research,based on the complementary and synergistic effects emphasized by urban network theory,this paper builds a theoretical analysis framework for the impact of urban network on economic performance.Drawing on the network capital theory of Huggins and Thompson(2014)and the idea of Sang(2015)for reference,the endogenous economic growth model is extended,and network factors are introduced into the product profit function and knowledge production function at the same time,so as to explore the impact of urban network on economic performance and its mechanism.The results of theoretical research show that the urban network has a significant role in promoting the economic growth rate,not only directly reducing the cost of information search and institutional transaction costs,but also conducive to promoting the production of new knowledge.Furthermore,this paper summarizes the mechanism of the urban network affecting economic performance as follows: First,the effect of information transmission.The market connection established between enterprises across city boundaries must be based on mutual trust or win-win results,which requires sufficient and necessary information exchange between enterprises.The construction of this information channel is exactly the important advantage of the connected enterprise compared with other local enterprises.The long-term establishment of cross-regional information channels can greatly reduce the cost of information search and transaction cost of enterprises in different places;Second,the market integration effect.The establishment of urban network that crosses city administrative boundaries can reduce the institutional cost between cities,ease the hindering effect of market segmentation,and thus realize the factors in a larger market scope and improve the efficiency of resource allocation.Third,the knowledge spillover effect.Network relationships are the key path for knowledge spillover.Enterprises far from knowledge-intensive areas can absorb and learn new ideas,technologies and knowledge of external enterprises through urban network,and achieve technological breakthroughs through mutual imitation and learning.Fourth,the effect of industrial division.The dynamic expansion process of the urban network has realized the integration of inter-regional functions and synergistic relationships,and the production of products can be realized in a larger scope by breaking through the boundaries of administrative regions,which is conducive to promoting cities of different scales to better realize the functional division in the value chain.In terms of empirical research,this paper conducts a visual display and characteristic analysis of China’s urban investment network from four aspects:network spatial structure,node cities,network paths and spatial clustering.On this basis,we focus on empirically examining the impact of urban network on economic performance.The results of the study show that even after controlling for the economic effects of agglomeration within the city,the borrowed size of the national central city,and the agglomeration externalities that may be brought about by cities within 200 kilometers of the surrounding area,enhancing the status of cities in the urban network still plays a significant positive role in promoting their productivity.The historical data of mutual investment between cities from 1971 to 1986,Ming and Qing guild halls and Ming Dynasty post stations are used as instrumental variables to solve the endogeneity problem,and the results show that the basic conclusions are very stable.Estimates of the heterogeneity of city size show that,compared with large cities,the promotion of small and medium-sized cities in the urban network can significantly improve productivity.Network benefits show a certain degree of inequality.The regional heterogeneity estimation results show that,compared with the eastern region,improving the status of small and medium-sized cities in the central and western regions in the network cannot significantly improve their productivity,indicating that certain conditions are required for the externality of the urban network to play.In addition,there is an inverted “U”-shaped relationship between the betweenness centrality of cities in the network and their productivity.It shows that once the intermediary position occupied by city nodes in the network increases to a threshold,the information obtained by the city in the network will begin to become redundant,resulting in a decrease in its productivity.There is a linear positive correlation between the centrality of the eigenvector and the urban productivity,that is,the more important the status of other nodes connected to the urban node in the network,the more conducive to the promotion of the urban productivity.This can be used to explain why small and medium-sized cities benefit more from the network.On this basis,we further use the CLDS micro-labor force survey data to empirically test the impact of urban networks on labor wages.After a series of robustness tests,the results show that a city’s promotion of its status in the urban network can lead to a labor wage premium.In terms of mechanism research,this paper analyzes the action mechanism proposed in the theoretical analysis section by constructing the city pairing data at the city i-city j-year t level and using the mediation effect model.First,due to data limitations,it is difficult to directly test the information transfer effect of urban networks.We use the ERGM estimation method to examine the role of the network self-organization effect,and use the dynamic panel model to test the robustness.The results both prove the existence of the information channel effect.Second,we use the relative price method to construct a market segmentation index to examine market consolidation effects.The results show that the formation of cross-administrative investment relationships between cities significantly reduces the degree of market segmentation.Third,the mechanism research based on patent transfer data put forward that the more investment linkages between cities,the stronger the diffusion or absorption capacity of the imported technology,which is conducive to the establishment of knowledge spillover channels between cities.In particular,the investment linkage network also effectively promotes knowledge spillovers across city-scale hierarchies,enabling small cities to directly access expertise and technology from mega and megacities by embedding investment networks.Finally,the research based on the mechanism of enterprise migration find that the investment linkages established between cities promote the migration of manufacturing enterprises from larger-scale cities to smaller-scale cities,and from national central cities to other peripheral cities.However,producer service enterprises have not shown the above-mentioned migration characteristics,which intuitively fully reflects the effect of industrial division.In terms of policy research,based on the development practice of urban agglomeration in China,this paper conducts an empirical test on the impact of urban agglomeration on economic performance and the network effect it exerts.It is proposed that urban agglomerations play a significant role in narrowing the intra-city productivity gap and promoting coordinated regional development,and this effect is not affected by the development stage of urban agglomerations.The results of the mechanism test show that the urban network is an important channel for urban agglomerations to promote regional coordinated development.The results of heterogeneity analysis show that urban agglomeration not only promotes the investment correlation between larger cities and smaller cities according to the city scale gradient,but also directly promotes the formation of networks between small cities and mega and mega cities,so that small cities can directly enjoy the benefits brought by the development of large cities through network relationships.Furthermore,we also conduct empirical research on the mechanism of urban agglomeration promoting the formation of urban investment network.It is found that urban agglomerations promote the formation of cross-regional investment networks among cities mainly by mitigating inter-provincial boundary effects and promoting cooperation between local governments.Therefore,the urban agglomeration,as the spatial expression of the urban network,promotes the coordinated development between regions by exerting the network effect,and it is well-founded to use it as the main form of promoting the urbanization process in China.This study can provide a new theoretical footnote for the construction of multi-center,multi-level and multi-node network urban agglomerations in the “14th Five-Year Plan” period,and also enrich the research in the field of space production and urban network by exploring the production value of flow space.The possible innovations of this paper are as follows: First,the research content.The existing studies on urban network tend to use visualization technology and descriptive statistical indicators to analyze the structural characteristics and evolution laws of urban networks,while empirical research on urban network externalities is weak in both quantity and quality.From the perspective of regional economics,this paper focuses on the analysis of the impact of urban network on economic performance,and systematically analyzes its mechanism of action.It is innovative to study urban network in the framework of economic analysis.Second,we draw on network capital theory and introduce network factors into product profit function and knowledge production function,so as to explore the impact of urban network on economic performance and its mechanism,which provides a feasible framework for analyzing the economic growth effects of urban networks.Thirdly,the research data.This paper uses the data of mutual investment between enterprises registered in industry and commerce to describe Chinese urban network in a more comprehensive and true way,which provides new and important evidence for in-depth study of Chinese urban network.Fourth,the research methods.In the existing research on the empirical analysis of urban network,most of the literature ignores the treatment of endogenous problems.In this paper,the historical data of mutual investment between cities,Ming and Qing guild halls and Ming Dynasty post stations are used as instrumental variables to solve the bias caused by endogenous problems as much as possible.In addition,we use the more advanced ERGM method in the mechanism test.This method can not only examine the effect of network self-organization structure,but also include urban attribute characteristics and other network relationships in the model,and comprehensively analyze the influence of various factors on network formation.At present,this method is rarely used in domestic urban network research.