The Spillover Effects of Economic Development in Provincial Capital: An Analysis Based on Industrial Enterprise Data
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| Title | The Spillover Effects of Economic Development in Provincial Capital: An Analysis Based on Industrial Enterprise Data
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| Author | Zhao kui,Hou Qingsong and Li We |
| Organization | Huazhong University of Science and Technology;Agricultural Bank of China |
| Email | zhaokui2015@hust.edu.cn；tsingsonghou@hust.edu.cn；378633196@qq.com |
| Key Words | Strategy of Strengthening Provincial Capitals; Spillover Effects;Learning;Bartik-type Instrumental Variables |
| Abstract | How to coordinate the economic development between cities is an important issue. One view advocates to strictly control the size of large cities and develop small and medium-sized cities, while the other opposite view advocates the strategy of strengthening provincial capitals and to promote the development of local cities by the development of provincial capitals. The difference between the two policy propositions reflects the different opinions among people on whether the development of provincial capitals should promote or hinder the development of local cities. This paper uses the panel data at the city-industry level from 1998 to 2012 constructed by the database of Chinese industrial enterprises to study the impact of industrial development in provincial capitals on urban development in other parts of the province, and uses the Bartik-type instrumental variable constructed by the shifting-share method to solve the endogeneity problem. The regression results show that the industrial development of provincial capitals will significantly drive the development of local cities, achieving the effect of taking off together. The spillover effect is very large: every 1 percentage point increase in the industrial development of provincial capitals will drive the development of local cities by 0.2~0.3 percentage points. A range of robustness tests support this result. This paper also distinguishes two mechanisms: learning mechanism and labor division mechanism. The empirical analysis shows that the learning mechanism plays a leading role. Finally, this paper further analyzes the influence of industrial development in provincial capitals from the perspective of upstream and downstream industry links, and finds that the spillover effect is even stronger than before, with its influence at about 0.3~0.5 percentage points. This study provides empirical support for the implementation of the strategy of strengthening provincial capitals. |
| Serial Number | WP1472 |
| Time | 2021-03-09 |
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