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Does geographical decentralisation harm the total factor productivity of firms in China?

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  • Peng Ji
  • Lilin Yuan

Abstract

Under dual market and policy forces, industries vacated central business districts in Chinese cities, showing a decentralised layout. Using Chinese industrial firms’ micro-data (2004–12), with township-level division as the unit, we describe urban industrial decentralisation and polycentric layout, exploring their impact on firms’ total factor productivity (TFP). We found that: (1) industrial decentralisation negatively impacted TFP during the early and middle stages of urbanisation; (2) the polycentric layout can alleviate the firms’ TFP losses caused by decentralisation; and (3) industrial decentralisation reduces diversified agglomeration, lowering TFP. The conclusions of this study provide policy recommendations for urban industrial spatial planning.

Suggested Citation

  • Peng Ji & Lilin Yuan, 2024. "Does geographical decentralisation harm the total factor productivity of firms in China?," Regional Studies, Taylor & Francis Journals, vol. 58(3), pages 537-551, March.
  • Handle: RePEc:taf:regstd:v:58:y:2024:i:3:p:537-551
    DOI: 10.1080/00343404.2023.2229374
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