Exploring the non-linear effects of city size on urban industrial land use efficiency: A spatial econometric analysis of cities in eastern China

Abstract

Land scarcity is increasingly becoming a binding constraint on sustainable economic growth in countries undergoing rapid industrialization and urbanization, and research on the estimation and determinants of urban industrial land use efficiency (UILUE) has received considerable attention. However, previous studies have mainly focused on the socio-economic factors affecting UILUE, and little attention has been devoted to the impacts exerted by the size characteristics of cities. This research proposes an analytical framework for exploring the effects of city size on UILUE from the perspective of agglomeration externalities, and empirically investigates such effects by estimating the spatial models of the determinants of UILUE, using data for 79 cities in eastern China for the period 2010−2016. The results suggest that city size has an inverted U-shaped impact on UILUE. There exist significant spatial interaction impacts and spatial heterogeneity of agglomeration effects between the sample cities. The actual city size in the year 2016 is also compared with the efficiency-maximizing city size. It is found that 12 out of the 79 cities are above the size where industrial land use efficiency peaks, and 67 cities are below the efficiency-maximizing size. Since most cities are away from the efficiency-maximizing size, there is a necessity to improve urbanization policies, land use policies and urban management policies so as to fully exploit gains from agglomeration and reduce agglomeration diseconomies.