The Synergy Effects of City Size and Industrial Structure on Urban Labor Productivity in China

Abstract

Based on the panel data of 281 cities at prefecture level or above from 2000 to 2013,this paper empirically studies the synergy effects of city size and industrial structure on urban labor productivity in China by comprehensively using econometric methods such as GMM,threshold panel model and spatial panel model. It arrives at the following conclusions: firstly,there is an inversed U-shape relationship between urban labor productivity and city size and also the same one between urban labor productivity and the added value ratio of the secondary industry to the tertiary industry; secondly,the role of city size bonus is subject to industrial structure,and structure bonus concerning industrial structure is also affected by city size. Accordingly it argues that although a small number of mega and big cities have the initial sign of diseconomies of scale,the sizes of the vast majority of medium-sized cities are still small,and size bonus is worthy of further development. At the same time,the vast majority of cities have not yet fully played the potential of the second industry,so it is not suitable to carry out deindustrialization prematurely. Thus it provides a series of policy suggestions about city development strategy in China,namely urban scale optimization and industrial restructuring should be encouraged by more market-oriented means.