Different types of industrial agglomeration and green total factor productivity in China: do institutional and policy characteristics of cities make a difference?

Abstract

This paper applies panel data of 281 prefecture-level cities in China from 2004 to 2017 to calculate the green total factor productivity (GTFP) at the city level. Then, it examines the influences of various forms of industrial agglomeration on GTFP and its two decomposition factors. The results demonstrate that the agglomeration of the manufacturing industry rather than producer services can effectively improve the GTFP of cities mainly through stimulating internal technological progress. However, the collaborative agglomeration of manufacturing and producer services has a significant positive correlation with GTFP. In addition, the heterogeneity analysis shows that for cities with institutional and policy advantages, collaborative agglomeration can play a more substantial effect. But, for ordinary cities, manufacturing agglomeration is more beneficial to furthering the growth of GTFP.