Technical Papers
Aug 22, 2024

Impact of Productive Service Agglomeration on Urban Technological Innovation: Based on China's 19 Urban Agglomerations

Publication: Journal of Urban Planning and Development
Volume 150, Issue 4

Abstract

Urban agglomerations, emerging as pivotal spatial units, increasingly attract essential production factors—talent, technology, and capital—thereby transforming cities into innovation hubs. This study critically examined how productive service agglomeration, through the lens of agglomeration economies and externalities, acts as a catalyst for urban technological advancement. It investigated the spatial effects and underlying mechanisms by which productive service industry agglomerations impact urban technological innovation. Our findings reveal that both specialized and diversified agglomerations significantly enhance urban technological capabilities. However, diversified agglomerations might also negatively impact surrounding areas, revealing a complex spatial interplay. Importantly, while the aggregation of productive services boosts innovation by attracting R&D talent, it does not similarly influence the movement of R&D capital, thereby limiting further technological advancements. The effects of specialized and diversified agglomerations vary across different urban scales and regions. In China, although the productive service industry largely comprises lower-end sectors like finance, leasing, and business services, high-end tech industries remain underdeveloped, lacking robust growth momentum. This study underscores a critical gap in understanding the differential impacts of service industry agglomerations on urban innovation ecosystems and emphasizes the need for nuanced policy interventions to optimize these dynamics for sustainable urban and technological development.

Get full access to this article

View all available purchase options and get full access to this article.

Data Availability Statement

Some or all data, models, or codes that support the findings of this study are available from the corresponding author upon reasonable request.

References

Abonazel, M. R. 2020. “Determinants of per capita personal income in the US: Spatial fixed effects panel data modeling.” J. Adv. Res. Appl. Math. 5: 1–13. https://doi.org/10.24321/2455.7021.202001.
Bai, J., Y. Wang, F. Jiang, and J. Li. 2017. “R&D factor flow, spatial knowledge spillovers, and economic growth.” [In Chinese.] Econ. Res. 52 (7): 128–142.
Bailly, A. S. 1995. “Producer services research in Europe.” Prof. Geogr. 47 (1): 70–74. https://doi.org/10.1111/j.0033-0124.1995.00070.x.
Bakker, J. 2017. “The log–linear relation between patent citations and patent value.” Scientometrics 110 (2): 879–892. https://doi.org/10.1007/s11192-016-2208-7.
Bettencourt, L. M., J. Lobo, D. Helbing, C. Kühnert, and G. B. West. 2007. “Growth, innovation, scaling, and the pace of life in cities.” Proc. Natl. Acad. Sci. USA 104 (17): 7301–7306. https://doi.org/10.1073/pnas.0610172104.
Betz, T., S. J. Cook, and F. M. Hollenbach. 2020. “Spatial interdependence and instrumental variable models.” Polit. Sci. Res. Methods 8 (4): 646–661. https://doi.org/10.1017/psrm.2018.61.
Borodako, K., J. Berbeka, M. Rudnicki, and M. Łapczyński. 2019. “The contribution of human capital to the performance of knowledge-intensive business services.” Ann. Manage. Organ. Res. 1 (2): 141–153. https://doi.org/10.35912/amor.v1i2.338.
Caragliu, A., and B. C. F. Del. 2019. “Smart innovative cities: The impact of smart city policies on urban innovation.” Technol. Forecasting Social Change 142: 373–383. https://doi.org/10.1016/j.techfore.2018.07.022.
Chen, C., Y. Sun, Q. Lan, and F. Jiang. 2020. “Impacts of industrial agglomeration on pollution and ecological efficiency—A spatial econometric analysis based on a big panel dataset of China’s 259 cities.” J. Cleaner Prod. 258: 120721. https://doi.org/10.1016/j.jclepro.2020.120721.
Combes, P. P. 2000. “Economic structure and local growth: France, 1984–1993.” J. Urban Econ. 47 (3): 329–355. https://doi.org/10.1006/juec.1999.2143.
Cvetanović, S., and D. Despotović. 2014. “Knowledge as the component of human capital in economic growth models.” Škola Biznisa 1: 1–17. https://doi.org/10.5937/skolbiz1-5976.
Dai, Y. 2021. “How does synergistic agglomeration of productive service industry and manufacturing industry promote regional innovation.” Acad. J. Bus. Manage. 3 (6): 27–43. https://doi.org/10.25236/AJBM.2021.030605.
Dasgupta, S., K. Kim, and L. Pinedo Caro. 2017. “As much to be gained by merchandise as manufacture? The role of services as an engine of growth.” Jpn. Polit. Econ. 43: 37–39. https://doi.org/10.1080/2329194X.2018.1544031.
Dong, X., Y. Chen, Q. Zhuang, Y. Yang, and X. Zhao. 2022. “Agglomeration of productive services, industrial structure upgrading and green total factor productivity: An empirical analysis based on 68 prefectural-level-and-above cities in the Yellow River basin of China.” Int. J. Environ. Res. Public Health 19 (18): 11643. https://doi.org/10.3390/ijerph191811643.
Duranton, G., V. Henderson, and W. Strange. 2015. Vol. 5 of Handbook of regional and urban economics, 1–1653. Amsterdam, Netherlands: Elsevier.
Elhorst, J. P. 2012. “Dynamic spatial panels: Models, methods, and inferences.” J. Geogr. Syst. 14 (1): 5–28. https://doi.org/10.1007/s10109-011-0158-4.
Ettlie, J. E., and S. R. Rosenthal. 2011. “Service versus manufacturing innovation.” J. Prod. Innovation Manage 28 (2): 285–299. https://doi.org/10.1111/j.1540-5885.2011.00797.x.
Fang, C., and D. Yu. 2017. “Urban agglomeration: An evolving concept of an emerging phenomenon.” Landscape Urban Plann. 162: 126–136. https://doi.org/10.1016/j.landurbplan.2017.02.014.
Feldman, M. P. 2000. “Location and innovation: The new economic geography of innovation, spillovers, and agglomeration.” In The Oxford handbook of economic geography, edited by G. L. Clark, M. P. Feldman, and M. S. Gertler, 373–394. Oxford, UK: Oxford University Press.
Feng, Y., S. Zhong, Q. Li, X. Zhao, and X. Dong. 2019. “Ecological well-being performance growth in China (1994–2014): From perspectives of industrial structure green adjustment and green total factor productivity.” J. Cleaner Prod. 236: 117556. https://doi.org/10.1016/j.jclepro.2019.07.031.
Fernández, Y. F., M. F. López, and B. O. Blanco. 2018. “Innovation for sustainability: The impact of R&D spending on CO2 emissions.” J. Cleaner Prod. 172: 3459–3467. https://doi.org/10.1016/j.jclepro.2017.11.001.
Fornahl, D., and T. Brenner. 2009. “Geographic concentration of innovative activities in Germany.” Struct. Change Econ. Dyn. 20 (3): 163–182. https://doi.org/10.1016/j.strueco.2009.05.001.
Fritsch, M., and M. Wyrwich. 2021. “Is innovation (increasingly) concentrated in large cities? An international comparison.” Research Policy 50 (6): 104237. https://doi.org/10.1016/J.RESPOL.2021.104237.
Gan, L., X. Yang, L. Chen, B. Lev, and Y. Lv. 2022. “Optimization path of Economy–Society–Ecology system orienting industrial structure adjustment: Evidence from Sichuan province in China.” Ecol. Indic. 144: 109479. https://doi.org/10.1016/j.ecolind.2022.109479.
Geng, Y. 2023. “Research on the impact of industrial synergy agglomeration on regional innovation and development.” Front. Bus. Econ. Manage. 10 (1): 50–57. https://doi.org/10.54097/fbem.v10i1.9860.
Han, F., R. Xie, and J. Fang. 2018. “Urban agglomeration economies and industrial energy efficiency.” Energy 162: 45–59. https://doi.org/10.1016/j.energy.2018.07.163.
Han, F., and L. Yang. 2020. “How does the agglomeration of producer services promote the upgrading of manufacturing structure? An integrated framework of agglomeration economies and Schumpeter's endogenous growth theory.” J. Manage. World 36 (2): 72–94+219. https://doi.org/10.19744/j.cnki.11-1235/f.2020.0022.
Huang, X., and Z. Zhu. 2021. “The mechanism and path selection of productive services in promoting high quality development of manufacturing industry.” [In Chinese.] Reform 328 (6): 17–26.
Jacobs, J. 1961. Vol. 21 of The death and life of great American cities, 13–25. New York: Random House.
Jiang, T. 2022. “Mediating effects and moderating effects in causal inference.” China Ind. Econ. 5: 100–120. https://doi.org/10.19581/j.cnki.ciejournal.2022.05.005.
Lee, J. W., and W. J. McKibbin. 2018. “Service sector productivity and economic growth in Asia.” Econ. Modell. 74: 247–263. https://doi.org/10.1016/j.econmod.2018.05.018.
Li, S., and Y. Wang. 2022. “The impact of industrial agglomeration on urban innovation: An empirical analysis in China.” Earthline J. Math. Sci. 10 (2): 317–340. https://doi.org/10.34198/ejms.10222.317340.
Li, Z., Z. Chai, and L. Ren. 2023. “Spatial spillover effects of urban innovation on productivity growth: A case study of 108 cities in the Yangtze River Economic Belt.” PLoS One 18 (12): e0294997. https://doi.org/10.1371/journal.pone.0294997.
Lin, B., and R. Tan. 2019. “Economic agglomeration and green economy efficiency in China.” [In Chinese.] Econ. Res. J. 54 (2): 119–132.
Liu, B., J. Luo, K. Zheng, F. Wu, and X. Zhao. 2023a. “How will industrial collaborative agglomeration affect the efficiency of regional green development?” Front. Ecol. Evol. 11: 1179004. https://doi.org/10.3389/fevo.2023.1179004.
Liu, C., and L. Li. 2021. “Place-based techno-industrial policy and innovation: Government responses to the information revolution in China.” China Econ. Rev. 66: 101600. https://doi.org/10.1016/j.chieco.2021.101600.
Liu, C., C. Niu, and J. Han. 2019. “Spatial dynamics of intercity technology transfer networks in China’s three urban agglomerations: A patent transaction perspective.” Sustainability 11 (6): 1647. https://doi.org/10.3390/su11061647.
Liu, H., H. Zhao, and S. Li. 2023b. “Future social change of manufacturing and service industries: Service-oriented manufacturing under the integration of innovation-flows drive.” Technol. Forecasting Social Change 196: 122808. https://doi.org/10.1016/j.techfore.2023.122808.
Liu, P., Y. Zhao, J. Zhu, and C. Yang. 2022. “Technological industry agglomeration, green innovation efficiency, and development quality of city cluster.” Green Finance 4 (4): 411–435. https://doi.org/10.3934/GF.2022020.
Liu, S. R., and L. L. Xu. 2015. “Analysis of the current situation of the development of Chinese industrial structure.” Adv. Mater. Res. 1065: 2449–2453. https://doi.org/10.4028/www.scientific.net/AMR.1065-1069.2449.
Liu, X., and X. Zhang. 2021. “Industrial agglomeration, technological innovation and carbon productivity: Evidence from China.” Resour. Conserv. Recycl. 166: 105330. https://doi.org/10.1016/j.resconrec.2020.105330.
Lo, F. C., and P. J. Marcotullio. 2000. “Globalization and urban transformations in the Asia–Pacific region: A review.” Urban Stud. 37 (1): 77–111. https://doi.org/10.1080/0042098002302.
Marshall, A. 1890. Principles of economics. London: Macmillan.
Orsa, K., and K. Johan. 2019. “Agglomeration and innovation of knowledge intensive business services.” Ind. Innovation 27 (5): 538–561. https://doi.org/10.1080/13662716.2019.1573660.
Peng, C., E. Elahi, B. Fan, and Z. Li. 2022. “Effect of high-tech manufacturing co-agglomeration and producer service industry on regional innovation efficiency.” Front. Environ. Sci. 10: 942057. https://doi.org/10.3389/fenvs.2022.942057.
Peng, D., E. Elahi, and Z. Khalid. 2023. “Productive service agglomeration, human capital level, and urban economic performance.” Sustainability 15 (9): 7051. https://doi.org/10.3390/su15097051.
Porter, M. E. 1998. Vol. 76 (6) of Clusters and the new economics of competition, 77–90. Boston, MA: Harvard Business Review.
Savage, S. J., and D. Waldman. 2005. “Broadband internet access, awareness, and use: Analysis of United States household data.” Telecommun. Policy 29 (8): 615–633. https://doi.org/10.1016/j.telpol.2005.06.001.
Sedgley, N., and B. Elmslie. 2004. “The geographic concentration of knowledge: Scale, agglomeration, and congestion in innovation across US states.” Int. Reg. Sci. Rev. 27 (2): 111–137. https://doi.org/10.1177/0160017603262401.
Seo, B. K. 2022. “Co-creation of knowledge in the urban planning context: The case of participatory planning for transitional social housing in Hong Kong.” Cities 122 (5): 103518. https://doi.org/10.1016/j.cities.2021.103518.
Shao, S., X. Li, J. Cao, and L. Yang. 2016. “China’s economic policy choices for governing smog pollution based on spatial spillover effects.” [In Chinese.] Econ. Res. J. 51 (9): 73–88.
Venables, A. J. 1996. “Equilibrium locations of vertically linked industries.” Int. Econ. Rev. 37 (2): 341–359. https://doi.org/10.2307/2527327.
Wang, T., S. Wang, W. Ding, and H. Guo. 2023. “Can technological innovation and financial agglomeration promote the growth of real economy? Evidence from China.” Sustainability 15 (22): 15995. https://doi.org/10.3390/su152215995.
Wu, Y. 2015. “China’s services sector: The new engine of economic growth.” Eurasian Geogr Econ. 56 (6): 618–634. https://doi.org/10.1080/15387216.2016.1153429.
Xie, X., and K. Guo. 2024. “How does productive service agglomeration promote manufacturing servitisation from an innovation perspective?” Int. Rev. Financ. Anal. 92: 103091. https://doi.org/10.1016/j.irfa.2024.103091.
Xie, X., and C. Wang. 2024. “Productive services agglomeration: An accelerator of manufacturing servitization output?” Finance Res. Lett. 62: 105188. https://doi.org/10.1016/j.frl.2024.105188.
Xiong, W., and J. Li. 2023. “The knowledge spillover effect of multi-scale urban innovation networks on industrial development: Evidence from the automobile manufacturing industry in China.” Systems 12 (1): 5. https://doi.org/10.3390/systems12010005.
Yang, H., F. Zhang, and Y. He. 2021a. “Exploring the effect of producer services and manufacturing industrial co-agglomeration on the ecological environment pollution control in China.” Environ. Dev. Sustainability 23: 16119–16144. https://doi.org/10.1007/s10668-021-01339-7.
Yang, W., W. Shi, and D. Du. 2021b. “The spatial model and spatial mechanism of the global geo-economic co-operation: An empirical research based on the scale of commodity trade.” [In Chinese.] Sci. Geogr. Sin. 41 (11): 1875–1883.
Yao, Z., K. Ye, L. Xiao, and X. Wang. 2021. “Radiation effect of urban agglomeration’s transportation network: Evidence from Chengdu–Chongqing urban agglomeration, China.” Land 10 (5): 520. https://doi.org/10.3390/land10050520.
You, Z. 2023. “The impact of the spatial agglomeration of producer services on urban productivity.” J. Resour. Ecol. 14 (2): 344–356. https://doi.org/10.5814/j.issn.1674-764x.2023.02.012.
Yuan, H., Y. Feng, C. C. Lee, and Y. Cen. 2020. “How does manufacturing agglomeration affect green economic efficiency?” Energy Econ. 92: 104944. https://doi.org/10.1016/j.eneco.2020.104944.
Zeng, W., L. Li, and Y. Huang. 2021. “Industrial collaborative agglomeration, marketization, and green innovation: Evidence from China’s provincial panel data.” J. Cleaner Prod. 279: 123598. https://doi.org/10.1016/j.jclepro.2020.123598.
Zhang, C. 2016. “Agglomeration of knowledge intensive business services and urban productivity.” Pap. Reg. Sci. 95 (4): 801–819. https://doi.org/10.1111/pirs.12204.
Zhao, X., X. Ding, and L. Li. 2021. “Research on environmental regulation, technological innovation and green transformation of manufacturing industry in the Yangtze River Economic Belt.” Sustainability 13 (18): 10005. https://doi.org/10.3390/su131810005.

Information & Authors

Information

Published In

Go to Journal of Urban Planning and Development
Journal of Urban Planning and Development
Volume 150Issue 4December 2024

History

Received: Oct 25, 2023
Accepted: Jun 13, 2024
Published online: Aug 22, 2024
Published in print: Dec 1, 2024
Discussion open until: Jan 22, 2025

Permissions

Request permissions for this article.

Authors

Affiliations

Qingfeng Luo, Ph.D. [email protected]
School of Environment, Tsinghua Univ., Beijing 100084, China. Email: [email protected]
School of Management, Fudan Univ., Nanning 530007, China; School of Finance and Insurance, Guangxi Univ. of Finance and Economics, Nanning 530007, China (corresponding author). ORCID: https://orcid.org/0009-0003-9574-5688. Email: [email protected]
Professor, Institute of Western China Economic Research, Southwestern Univ. of Finance and Economics, Chengdu 611130, China. Email: [email protected]

Metrics & Citations

Metrics

Citations

Download citation

If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.

View Options

Get Access

Access content

Please select your options to get access

Log in/Register Log in via your institution (Shibboleth)
ASCE Members: Please log in to see member pricing

Purchase

Save for later Information on ASCE Library Cards
ASCE Library Cards let you download journal articles, proceedings papers, and available book chapters across the entire ASCE Library platform. ASCE Library Cards remain active for 24 months or until all downloads are used. Note: This content will be debited as one download at time of checkout.

Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.
ASCE Library Card (5 downloads)
$105.00
Add to cart
ASCE Library Card (20 downloads)
$280.00
Add to cart
Buy Single Article
$35.00
Add to cart

Get Access

Access content

Please select your options to get access

Log in/Register Log in via your institution (Shibboleth)
ASCE Members: Please log in to see member pricing

Purchase

Save for later Information on ASCE Library Cards
ASCE Library Cards let you download journal articles, proceedings papers, and available book chapters across the entire ASCE Library platform. ASCE Library Cards remain active for 24 months or until all downloads are used. Note: This content will be debited as one download at time of checkout.

Terms of Use: ASCE Library Cards are for individual, personal use only. Reselling, republishing, or forwarding the materials to libraries or reading rooms is prohibited.
ASCE Library Card (5 downloads)
$105.00
Add to cart
ASCE Library Card (20 downloads)
$280.00
Add to cart
Buy Single Article
$35.00
Add to cart

Media

Figures

Other

Tables

Share

Share

Copy the content Link

Share with email

Email a colleague

Share