The direct and indirect drag effects of land and energy on urban economic growth in the Yangtze River Delta, China

Abstract

This paper estimates the direct and indirect drag effects of land and energy on urban economic growth in the Yangtze River Delta in China over the period of 2003–2012. Using the spatial Durbin panel data model (SDPDM), we found that such urban economic growth is spatially autocorrelated and that resource input has a positive impact on economic growth. The SDPDM results show that the direct drag effect of land and energy is, respectively, 0.75 and 2.38%, indicating that the constraints of land and energy will reduce the economic growth rate by 0.75 and 2.38%. Besides, the indirect drag effect is 0.40 and 4.86%, suggesting that the focal unit’s economic growth would also be influenced by the behavior of its neighbors. Based on these results, this paper proposes some policy recommendations.