The role of ports in the economic development of port cities: Panel evidence from China

Abstract

Recently the driving force for economic growth in China's port cities is insufficient, and ports are suffering from the capacity surplus in the context of the global recession. To find out whether the problem could be relieved by adjusting port and city development strategy, the present study examined the relationship between economic indicators of the port city and the port throughput. Panel data regression models were estimated to examine the extent of impact between port throughput and city economy with the second-generation panel data analysis methods, with panel data for 16 port-city pairs in China over the period 2000–2016. Results suggest that port throughput imposes a non-negligible impact on GDP while it has an opposite effect on the amount of total retail sales of consumer goods (TRSCG). Regarding the economic structure indicators, the port throughput increases synchronously with the added value of the secondary industry (SI) but negatively with that of the primary industry (PI) and the tertiary industry (TI). The causality test confirms an interactive mechanism between the port city economy and the port throughput in the sampled city-port pairs. The underlying reasons were discussed, and several policy suggestions to respond to the research question were proposed.