The Impact of City Cluster Development on the Inter-City Disparity: Evidence From China

Abstract

City clusters are important carriers for China's future urbanization and vital areas for promoting coordinated regional development and common prosperity. The authors first divide the city clusters into Types I, II, and III according to the characteristics of their development stages, and measure the degree of development of city clusters by using city-level night time light (NTL) data and inter-city commuting time, and empirically identify the types of China's city clusters. On that basis, the authors examine the influence of city cluster development on the inter-city disparity from a perspective of urban agglomeration. The results show that the development of Type I city clusters can lead to the widest inter-city disparity, and that of Type II city clusters ranks the second place in this regard, while that of Type III city clusters can narrow the inter-city disparity. Furthermore, using the 268-year historical geographic data of the Qing Dynasty, the authors construct instrumental variables to address the endogeneity issues, and find that the above conclusions are robust. This study also finds that the factor allocation for the development of Types I and II city clusters is oriented towards labor, while that for Type III city clusters is oriented towards capital. Besides, different types of city clusters vary in the extent of correcting factor misallocation for their development. The differences in the orientation of factor allocation and the extent of factor misallocation correction constitute the main mechanism for the heterogeneous influence of city cluster development on the inter-city disparity. China's city cluster development strategy should adopt a category-based approach to avoid homogenization, conform to the objective laws, and make greater use of central cities' spatial spillover effects.