Specialization and diversification in cities: The evidence from China

With the rapid development of world economy, the issues of urban development have become one of the most important subjects on the world. Specialization and diversification are the distinct characteristics of cities which resulted from the different externalities of agglomeration economies. We differentiate the sources of urban agglomeration economies, clarify the relations between specialization, diversification and externality, measure the level of specification and diversification of cities in China based on the data of 286 cities(contain all central cities excluded Lhasa) of 2009 and 2010. Furthermore, we compare the relative-specialization indexes and relative-diversification index of cities in China with the indexes in America which calculated by Duranton and Puga. Most of the characteristics of China are consistent with American, although the magnitudes of index are quite different and the relationships between city employment and relative-diversity index are somewhat different.