Co-location of manufacturing and producer services in Nanjing, China

Abstract

Most existing research examines the spatial patterns of manufacturing and producer services via separate investigations and from provincial and municipal perspectives. This paper, however, analyzes the co-location of manufacturing and producer services and their influencing factors from an intra-urban perspective. This empirical study is based in Nanjing and uses a 2001 basic unit census dataset and a 2008 economic census dataset at the firm level. The results show that the suburbanization process of manufacturing was much faster than that of producer services and indicate the establishment of producer services in the urban core and manufacturing in the periphery. The employment of producer services was highly concentrated in urban centers in the two interval years, but gradually expanded to surrounding new towns such as Jiangning, Pukou, and Luhe. In contrast, the employment in manufacturing was dispersed with substantial distribution in the old city and in suburban development zones. Manufacturing and producer services were largely co-located in the new towns of Jiangning and Pukou and national development zones. The spatial autoregression model indicates that the spatial distribution of manufacturing and producer services was subject to the joint effects of agglomeration economics and urban land price, which led the two sectors to retain a degree of spatial separability, even though their co-location was preferable. The distribution of manufacturing was significantly affected by land prices and constantly re-concentrated from urban centers to development zones and township industrial parks in suburban areas. Comparatively, the distribution of producer services was not significantly affected by land price and gradually occupied city centers with high land prices because the sector had a stronger capacity for bid rent.