Can urban agglomeration policies promote regional economic agglomeration? Evidence from the Yangtze River Economic Belt in China

Abstract

The impact of implementing urban agglomeration policies (UAPs) on regional economic agglomeration is crucial for achieving coordinated regional development. This study examines the effects of UAPs on economic agglomeration in the Yangtze River Economic Belt (YREB) in China using panel data from 108 cities spanning from 2006 to 2020. Various research methodologies, such as spatio-temporal variation analysis, Differences-in-Differences (DID), Propensity Score Matching DID (PSM-DID), and Spatial Autocorrelation DID (SACDID) models, are employed. The results indicate a diffusion effect in economic agglomeration of the YREB, leading to a transition from a multilevel center-periphery structure to a contiguous clustering pattern. UAPs have, however, resulted in the concentration of the regional economy towards central cities. Urban agglomerations exhibit an internal siphon effect and a diffusion effect on their exterior. The combination of these two effects manifests itself as a certain degree of siphon. Specifically, UAPs have caused both siphon and diffusion effects in the middle region of the YREB, with less significant impacts in the eastern and western regions. The siphon effects of central cities are influenced by both geographical distance from other cities and, more importantly, economic disparities between them. During the study period, the UAPs served as the indirect rather than direct factor of regional economic coordination.