Inter-City Spillover and Intra-City Agglomeration Effects Among Local Labour Markets in China

34 Pages Posted: 29 May 2019

See all articles by Xiaodong Gong

Xiaodong Gong

University of Canberra

Jiti Gao

Monash University - Department of Econometrics & Business Statistics

Xuan Liang

Australian National University (ANU), Research School of Finance, Actuarial Studies and Statistics

Date Written: May 2, 2019

Abstract

We examine how city size affect wage levels of cities (agglomeration externality) and how it influence surrounding cities (spill-over effect) in China for the period between 1995 and 2009. Using spatial fixed-effect panel data models and allowing for endogenous and exogenous spatial dependence, we find strong positive city size effect on real wage levels, which confirms the existence of agglomeration economy within cities. We also find significant differences in both the direct and indirect effect of factors such as FDI between more and less population dense areas.

Keywords: agglomeration economy, spill-over, spatial econometrics, fixed-effects

JEL Classification: C23, R12, R23

Suggested Citation

Gong, Xiaodong and Gao, Jiti and Liang, Xuan, Inter-City Spillover and Intra-City Agglomeration Effects Among Local Labour Markets in China (May 2, 2019). Available at SSRN: https://ssrn.com/abstract=3381453 or http://dx.doi.org/10.2139/ssrn.3381453

Xiaodong Gong (Contact Author)

University of Canberra ( email )

Canberra, Australian Capital Territory 2601
Australia

Jiti Gao

Monash University - Department of Econometrics & Business Statistics ( email )

900 Dandenong Road
Caulfield East, Victoria 3145
Australia
61399031675 (Phone)
61399032007 (Fax)

HOME PAGE: http://www.jitigao.com

Xuan Liang

Australian National University (ANU), Research School of Finance, Actuarial Studies and Statistics ( email )

Canberra, Australian Capital Territory 2601
Australia

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