The Effect of Resource-saving Policy on Urban Areas’ Total Factor Productivity Growth in the Wuhan Metropolitan Area, China

Authors: Anlu Zhang*,
Topics: Economic Geography, Spatial Analysis & Modeling, Urban Geography
Keywords: Data envelopment analysis; Malmquist productivity index; total factor productivity; beta-convergence; spatial auto-regressive model; urbanization
Session Type: Paper
Day: 4/3/2019
Start / End Time: 4:30 PM / 6:10 PM
Room: Jackson, Marriott, Mezzanine Level
Presentation File: No File Uploaded

Global economic growth has underpinned rapid urban sprawl over the last decades, particularly in emerging and developing countries. However, the expansion of urban areas necessitated large amounts of resources and resulted in the loss of prime agricultural land. China has experienced an unprecedented expansion of its urban areas, including the emergence of many mega-cities. We assessed the effect of resource-saving policy on convergence of urban areas’ total factor productivity (TFP) with annual data for 48 counties in Wuhan metropolitan area in China from 2001 to 2015, a period in which study area’s urbanization rate grew from 34% to 58%. We used a data envelopment analysis (DEA) to calculate technical efficiency and quantified the spatial and temporal changes of urban areas’ TFP with the Malmquist productivity index. Moreover, we further tested for convergence of the TFP using the spatial auto-regressive models. We find an overall low economic efficiency of urban areas of 0.55 but an average yearly TFP increase of 9.5%. TFP was higher in the main development zones, mainly due to faster technological progress in these areas. Finally, there is a sharp difference in TFP between ex post and ex ant establishment of resources saving and environmental friendly society, which means the policy could contribute to improve TFP growth among counties. Thus, countries and regions under economic transformation could make a reasonable division of land functional zones for improving the land intensive use of the urban area and protecting the food supply.

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