Spatial Agglomeration Effects and Labor Productivity Variations: Evidence from Chinese Cities

This paper estimates agglomeration effects on labor productivity for more than 200 Chinese cities from 2001 to 2005, taking into account endogeneity of spatial distribution of employment and spatial fixed effects. Econometric results suggest that agglomeration effects in China are larger than US and European countries, and these effects became larger 2001 through 2005. Results also demonstrate agglomeration effects vary greatly among different parts of China. As control variables, human capital effects and regional fixed effects are estimated as well.