An Empirical Research On The Effect Of City Size On Labor Productivity

As the administrative center and economic center,the city has gathered a large number of resources and also contributed to the vast majority of economic growth.The traditional localization economic theory points out that the collective gathering of population and industry in cities improves the production efficiency of cities by three externalities:intermediate products sharing,labor market pooling,and technological spillovers,resulting in agglomeration economies;on the other hand,cities overexpansion will also result in high rents and transportation costs.The so-called"congestion effects" will have a negative effect on the productivity of cities.Therefore,under the dual influence of agglomeration and crowding effects,a complete relationship between city scale and labor productivity should be an inverted"U" type that with the city expand labor productivity increases first and then decreases,and the vertex of curve determines the optimal size of the city.Existing research shows that the optimal size of cities is not unique.For heterogeneous cities,different types of cities have different size-efficiency curves and optimal city size due to their different functions and structures.The heterogeneity of the industrial structure has received a lot of attention from the literature.The industrial structure can also influence the agglomeration economy and it has also been rigorously proved.Therefore,in cities with uneven industrial structure in China,the city size has different effects.on labor productivity.Noteworthy.A city should continue to promote the process of urbanization,or should focus on the upgrading of industrial structure,infrastructure,and other factors that affect the city's labor productivity.It is of utmost importance to "prescribe the right medicine" instead of blindly expanding the scale of the city.In the empirical regression analysis,the thesis takes the urban panel data of 281 prefecture-level and above cities from 2003 to 2013 as a sample,and uses the ordinary panel regression and space panel regression methods to verify the agglomeration economies,as well as the inverted "U" type relationship between the city size and labor productivity.Subsequently,the thesis studied the different effects of industrial structure on agglomeration economies in detail,combined with the characteristics of China's urbanization lagging behind industrialization,grouping cities in China with industrial structure and urban scale,focusing on the different effects of city size on labor productivity in heterogeneous cities with high industrialization or low industrialization.The study found that:(1)In large cities,the increase in the city size reduces labor productivity.The urban population growth should be appropriately controlled,and at the same time,urban economic efficiency should be enhanced through other means such as upgrading industrial structure and optimizing infrastructure.(2)In small and medium-sized cities with a low level of industrialization,the increase of city size has no significant effect on the improvement of labor productivity.Urbanization and industrialization should be promoted at the same time to improve the labor productivity.(3)In small and medium-sized cities with a high level of industrialization,the expansion of urban scale has significantly increased labor productivity.These cities should continue to promote the process of urbanization and increase labor productivity.Based on the above research,the policy recommendations given in this thesis for urban economic development are:(1)Ensure appropriate urban agglomeration densities and avoid excessive expansion of cities,hindering the efficient operation of production activities in various sectors.(2)Promote the size development of small and medium-sized cities,bring agglomeration economies together,and thus increase the efficiency of urban production.(3)Promote the upgrading of industrial structure in large cities,upgrade the optimal city scale through the upgrading of industrial structure,and re-acquire an agglomeration economy.