Smart Cities are Big Cities -- Comparative Advantage in Chinese Cities

56 Pages Posted: 4 Nov 2014

See all articles by Shiwei Hu

Shiwei Hu

Independent

Steven Brakman

University of Groningen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Charles van Marrewijk

Utrecht University - School of Economics

Date Written: October 23, 2014

Abstract

The literature on China indicates that the concentration of economic activities in China is less than in other industrialized countries. Institutional limits are largely held responsible for this finding (e.g. the Hukou system); firms and workers are not able to take full advantage of the benefits from agglomeration economies. China is changing rapidly, however, also in this respect. We show that, by using the methodology developed by Davis and Dingel (2013), high-skilled workers in high-skill intensive sectors sort into larger locations. We demonstrate this for regions, agglomerations, cities, and for skills, occupations, and sectors. The results are strongest for cities and skills, followed by agglomerations and occupations, respectively. Between 2000 and 2010 this sorting process has become stronger, which we interpret as an indication that institutional limitations in China against further agglomeration weaken, and that the consensus in the literature that 'Chinese cities are too small' needs some qualification.

Keywords: urban specialization, skill concentration, agglomeration economies

JEL Classification: R11, R12, J61, L70

Suggested Citation

Hu, Shiwei and Brakman, Steven and van Marrewijk, Charles, Smart Cities are Big Cities -- Comparative Advantage in Chinese Cities (October 23, 2014). CESifo Working Paper Series No. 5028. Available at SSRN: https://ssrn.com/abstract=2518951

Shiwei Hu

Independent ( email )

No Address Available

Steven Brakman (Contact Author)

University of Groningen - Department of Economics ( email )

P.O. Box 800
9700 AV Groningen
Netherlands
+31 50 363 3746 (Phone)
+31 50 363 3730 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Charles Van Marrewijk

Utrecht University - School of Economics ( email )

Kriekenpitplein 21-22
Adam Smith Building
Utrecht, 3584 EC
Netherlands
*31-(0)30-2539810 (Phone)

HOME PAGE: http://www.charlesvanmarrewijk.nl

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