Impact of turning counties into districts on county manufacturing upgrading:Policy evaluation with difference in differences in differences
County has long been the basic unit of national governance in China.Yet,only limited policy attention has been paid to counties.Recently,the central government proposed to carry out county-level urbanization to further deepen the people-centered new urbanization strategy.In this situation,counties need to provide enough jobs and decent income for rural emigrants.However,this is only the case for a small fraction of counties with prosperous local economies,and most of the rest counties need to enhance their industrial development to absorb the rural emigrants.Since China's industrialization process is largely influenced by the government,boundary adjustment,such as turning counties into urban districts,may also influence the local industrial development in various ways.Relying on the National Annual Survey of Industrial Firms Database(1998-2015),this paper constructs a county manufacturing industry dataset with 1110 counties and 376 four-digit level industries.With an Evolutionary Economic Geography approach,this paper explores the causal impacts of turning counties into districts on counties'manufacturing upgrading by employing difference in differences in differences method(DID).The empirical results show that,first,after turning counties into districts,counties have higher probabilities to enter more complex industries and exit less complex industries.And in both cases,the impacts of turning counties into districts has a time lag.Second,at the macro county level,turning counties into districts could benefit manufacturing upgrading through population agglomeration,economic development,infrastructure construction,and public service improvement;at the micro firm level,turning counties into districts could upgrade manufacturing industries by promoting output,intermediate inputs,profit,innovation,and tax reduction.Turning counties into districts has the largest impact on manufacturing upgrading in the eastern region and has negative impact in the central region.These findings could not only provide empirical support for the future implementation of turning counties into districts,but also enrich the institutional perspective of Evolutionary Economic Geography on regional industrial evolution.
turning counties into districtsmanufacturing upgradingindustrial evolutionknowledge complexityDIDChina
NETL
NSTL
万方数据
