Urban form deterioration and productivity in China

Abstract

This paper explores the linkages between urban form and productivity in Chinese prefecture-level cities from 2000 to 2019. While most of the literature has concentrated on the effects of population density, this paper calculates the distance between each raster pair within the city's largest continuous built-up area to capture the urban form variation by using the matched data of the European Space Agency Global Land Cover dataset and the Chinese administrative map. For the empirical evidence, we apply the instrumental variables strategy for dealing with the endogeneity between urban form and productivity. We find that urban form deterioration has a statistically significant negative effect on the city's total factor productivity, and the results are still robust with a series of robustness checks. Furthermore, according to the mechanism test, we find that urban form deterioration affects the city's economic performance by discouraging the aggregation of enterprises and population in the city. This study thus sheds new light on the adoption of urban expansion policies to solve the negative externality of urban form deterioration on economic performance in China.