Finance Research Letters 43 (2021) 101993

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Finance Research Letters

journal homepage: www.elsevier.com/locate/frl

Financial services, spatial agglomeration, and the quality of urban

economic growth–based on an empirical analysis of 268 cities
in China
Zoey Wong a, Rongrong Li b, Yidie Zhang c, Qunxi Kong b, *, Molly Cai b
a
School of Business, Nanjing University, Nanjing 210093, China
b
School of Industrial Development, Nanjing University of Finance & Economics, Nanjing 210003, China
c
School of Chinese Language and Literature, Jiangsu Normal University, Xuzhou 221116, China

A R T I C L E I N F O A B S T R A C T

Keywords: This paper measures the quality of China’s urban economic growth and analyzes the impact of the
Financial services spatial agglomeration of financial services on the quality of urban economic growth. First, the
Spatial agglomeration quality of China’s urban economic growth has maintained a trend of steady growth year by year,
Quality of urban economic growth
and regional differences have been shrinking. Second, the overall impact of the spatial agglom­
Principal component analysis
Spatial models
eration of financial services on the quality of urban economic growth is positive, and there is no
turning point for the time being. Third, the direct and indirect effects of the spatial agglomeration
in financial services are also significant.

1. Introduction and literature review

In an external environment of sluggish global economic growth, insufficient international market demand, and rising trade pro­
tectionism, promoting the development of productive services is an important step to improve the quality of China’s economic growth
(Kong et al., 2021; Wang & Kong, 2019; Zhang et al., 2019a). The spatial agglomeration of industries is a characteristic feature of
economic development. The current research on agglomeration and economic growth focuses on the effect of industrial agglomeration
on urban productivity.Most studies have found that industrial agglomeration has a positive impact on urban productivity (Día­
z-Bautista, 2005; Zhang and Zhao, 2009; Jin, 2015). Calthorpe and Fulton (2001) empirically tested the relationship between in­
dustrial concentration and economic growth using dynamic panel data on 26 manufacturing sectors in Spain for the period 1978–1992.
The results showed that both specialization and diversification of industrial agglomeration positively affect employment.Ottaviano
and Pinelli (2006) analyzed a sample of Finnish data and concluded that population density can significantly contribute to the growth
of income and house prices (Cheng et al., 2020). From the side, it proves that agglomeration plays a significant facilitating role in
influencing the productivity process. The research of Cheng and Zhang (2015) showed that the agglomeration of productive services
can positively affect the total factor productivity of cities.Huang and Zhang (2016) also found that productive services agglomeration
mainly affects urban productivity through technological progress.
Some scholars also believe that industrial agglomeration can hinder urban productivity growth by restraining technological
progress and spillover effects. Industrial agglomeration is spatially viscous, and the resulting extrusion effect will reduce productivity
(Ke& Yao, 2008; Cheng & Zhang, 2015). Ke (2010) found that agglomeration has life cycle characteristics.According to Venables

* Corresponding author at: School of Industrial Development, Nanjing University of Finance & Economics, Nanjing 210003, China.
E-mail address: kongqunxi@163.com (Q. Kong).

https://doi.org/10.1016/j.frl.2021.101993
Received 2 August 2020; Received in revised form 16 February 2021; Accepted 21 February 2021
Available online 22 February 2021
1544-6123/© 2021 Elsevier Inc. All rights reserved.
Z. Wong et al. Finance Research Letters 43 (2021) 101993

Table 1
Indicators of the quality of urban economic growth.
Primary indicators Secondary indicators Tertiary indicators

Economic growth momentum Level of human capital Share of higher population

Structure of economic growth
Results and costs of economic growth
Level of physical capital Fixed asset investment per capita
Level of innovation inputs Technology input intensity
Education expenditure per capita
Industrial structure Advanced industrial structure
Rationalization of industrial structure
Structure of investment consumption Investment rate
Consumption rate
Financial structure The ratio of the balance of deposits and loans of financial institutions
Sharing of results Total factor productivity
Capital productivity
Labor productivity
The average wage of employees
Green area per capita
Medical services
Transportation services
Cost of growth Energy consumption per unit of output
Level of atmospheric pollution per unit of output
Discharges of sewage per unit of output
Solid waste emissions per unit of output

Note: (1) The intensity of technology investment is expressed by the ratio of science and technology expenditure to fiscal expenditure, and per capita
expenditure on education is expressed by the ratio of expenditure on education to the total population. (2) The advanced industrial structure is
expressed by the ratio of tertiary industry output to secondary industry output. The Tylar index of structural deviation represents the rationalization
∑
of industrial structure. The formula is TL = ni=0 ln[(Yi /Li ) /(Y /L)], wherein idenotes the industry, n denotes the number of industrial sectors, and Y
and L denote the output value and the Number of employed. (3) The consumption rate is total final consumption as a percentage of gross city product,
and the investment rate is the total investment in fixed assets as a percentage of gross city product. The financial institution deposit and loan balance
ratio is the ratio of financial institution deposit and loan balances to regional GDP. (4) Total factor productivity is calculated using DEAP 2.1, using
regional GDP for output and capital stock and the number of employees for input. Capital productivity and labor productivity are the ratios of GDP to
capital stock and the rate of GDP to the total number of employees, respectively. Among them, the capital stock is estimated by the perpetual in­
ventory method with the formula Kt = Kt − 1(1 − δ) + It. K, δand I are the capital stock, the depreciation rate, and the real investment of the year (fixed
asset investment is chosen in this paper), and the economic depreciation rate is 9.6% (Zhang et al., 2019c). The base period capital stock is calculated
as K0 = I0/(g + δ). K0, I0, and g denote the average annual growth rate of the capital stock, real investment, and real investment in the sample period,
respectively, still taking 9.6%. (5) Medical services and transportation services are expressed using the number of doctors per 10,000 people and
public gas/electric vehicles per 10,000 people. (6) All data are from the China Urban Statistical Yearbook, EPS database, etc.

(2011), the agglomeration effect is more pronounced in China’s larger cities in the productive services sector. At this point, the urban
economy will also be affected by the positive boosting effect. And agglomeration will likely continue to hinder economic development
until the congestion effect offsets the crowding-in effect. Zhang (2015) found that the agglomeration of high-end producer services has
a significant positive impact on the improvement of urban economic efficiency. In contrast, the effect of agglomeration of the low-end
producer services on economic efficiency is not apparent. Lv and Ren (2017) analyzed the relationship between the demographic
dividend, the development of producer services, and urban productivity. They found that the development of producer services can
promote the development of human capital to a large extent but significantly inhibit the growth of urban productivity.
Compared with existing studies, this paper may have the following three innovative aspects. First, there is a lack of research on the
impact of the concentration of productive services on the quality of China’s economic growth from a qualitative perspective. This
paper uses data from 268 cities to construct a city-level index system for China’s economic growth quality and to investigate the impact
of spatial concentration of financial services on the quality of urban economic growth.Second, when exploring the effect of the
agglomeration of financial services on the quality of economic growth, we should also consider spatial factors. This paper uses the
spatial lag model to distinguish the impact of the spatial agglomeration of financial services on the quality of China’s economic growth
into the effect on the quality of economic growth in local cities and the impact on the quality of economic growth in neighboring cities.
Third, considering the apparent gaps in the economic development of different regions in my country, this article starts from the city
level to empirically analyze the impact of the spatial agglomeration level of the financial service industry on the quality of China’s
economic growth.

2. Measurement and analysis of the quality of economic growth in Chinese cities

2.1. HQD indicator construction and measurement methods

Drawing on the approach of Zeng et al. (2019), this paper builds indicators of the quality of China’s economic growth using three
criteria: economic growth momentum, economic growth structure, and economic growth outcomes and costs.The evaluation index

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Z. Wong et al. Finance Research Letters 43 (2021) 101993

Table 2
China’s urban economic growth quality gap measurement results.
CV TEI HHI Gini

2004 0.5018 0.1057 0.0038 0.2399

2005 0.4949 0.1030 0.0039 0.2345
2006 0.4880 0.1004 0.0037 0.2292
2007 0.4811 0.0978 0.0036 0.2238
2008 0.4742 0.0951 0.0036 0.2185
2009 0.4673 0.0925 0.0035 0.2131
2010 0.4604 0.0899 0.0035 0.2077
2011 0.4536 0.0872 0.0036 0.2024
2012 0.4467 0.0846 0.0034 0.1970
2013 0.4398 0.0820 0.0034 0.1916
2014 0.4329 0.0793 0.0033 0.1863
2015 0.4260 0.0767 0.0035 0.1809
2016 0.4191 0.0741 0.0035 0.1756
2017 0.4122 0.0715 0.0032 0.1702
2018 0.4053 0.0688 0.0032 0.1648

Note: Commonly used measures of the variability of the data distribution include coefficient of variation (CV), Thiel index (TEL), Herfindahl-
Hirschman index (HHI), and Gini coefficient (Gini). Among them, (1) the coefficient of variation (CV) can be obtained directly from the standard
deviation of the data divided by the mean. The greater the absolute value of this value, the greater the gap that exists between the data distributions.
(2) The Thiel Index (TEL) is a measure of inequality and has been used primarily to measure income disparities between individuals or regions. The
1 ∑n 1 ∑n
formula is TEL = (y /y)log(yi /y),y =
i=1 i
y . The range of values is between 0 and 1. When the index takes 0, it means that the quality
i=1 i
n n
level of economic growth between cities is absolutely equal; the index tends to 1 means that the difference in the quality level of economic growth
∑ ∑
between cities is very large. (3) The formula for the Herfindahl-Hirschman Index (HHI) is HHI = ni=1 S2i ,Si = yi/Y, Y = ni=1 yi . The range of values
for this indicator is (1 /n) ∼ 1.If n is large and the quality level of economic growth between cities tends to be balanced, HHI tends to be 0. When HHI
takes 1, it means that the quality level of economic growth between cities is completely unbalanced; when HHI is 1/n, it means that the quality of
1 ∑n ∑n ⃒⃒ ⃒
⃒
economic growth between cities is completely balanced. (4) The Gini coefficient (Gini) is calculated as follow:G = 2 ⃒yi − yj ⃒.
2n i=1 j=1

Table 3
Results of Pearson’s correlation coefficient test.
CV TEI HHI Gini

CV 1.0000 0.9667 0.9334 0.9342

TEI 0.9873 1.0000 0.9627 0.9635
HHI 0.9235 0.9817 1.0000 0.9728
Gini 0.9264 0.9864 0.9723 1.0000

Note: Organized by the author.

system constructed in this paper involves a total of 20 fundamental indicators, and the specific content of the indicators and their
statistical descriptions are shown in Table 1. After quantization of the original indicators, this paper uses principal component analysis
to measure the composite index of economic growth quality in Chinese cities.
Moreover, the incommensurability of the metrics needs to be addressed before the specific calculation of the economic growth
quality indicators can be made. The incommensurability in the underlying indicators that make up the composite index of economic
growth quality in Chinese cities makes it impossible to calculate each of the underlying indicators directly. Therefore, this paper takes
the reciprocal of all inverse indicators in the urban growth quality index. Some of the fundamental indicators in the indicator system
can be obtained directly from the China Urban Statistical Yearbook2004–2018, provincial statistical yearbooks, the EPS database, and
the website of the National Bureau of Statistics of the People’s Republic of China, etc. Other indicators have to be calculated. Since the
first year of total factor productivity measured by DEAP software is 1, 2003 is used as the base period. The sample period is 2004–2018.
This paper uses linear interpolation to fill in some of the missing data. For the outlier data values, data adjustment is performed using
the average growth rate. Also, all relevant data are deflated in the calculation process. Data for the GDP index, consumer price index,
and fixed asset investment index are obtained from the China Statistical Yearbook.

2.2. Analysis of results

This paper uses four indices—the coefficient of variation (CV), the Thiel index (TEL), the Herfindahl-Hirschman index (HHI), and
the Gini coefficient (Gini)—to examine the disparity in the quality level of economic growth in Chinese cities. The results are shown in
Table 2. There is indeed a notable gap in the quality level of economic growth among Chinese cities, but this gap is narrowing year by

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Z. Wong et al. Finance Research Letters 43 (2021) 101993

Table 4
Moran’s I values for the quality of China’s economic growth.
vintage 2004 2005 2006 2007 2008 2009 2010 2011

Moran’s I 0.219*** 0.192*** 0.205*** 0.235*** 0.430*** 0.229*** 0.248*** 0.469***

z-value [6.173] [5.478] [5.754] [6.685] [11.853] [6.480] [7.064] [12.927]
vintage 2012 2013 2014 2015 2016 2017 2018 –
Moran’s I 0.506*** 0.323*** 0.457*** 0.234*** 0.226*** 0.519*** 0.461*** –
z- value [13.924] [9.120] [12.588] [6.738] [6.360] [14.292] [12.549] –

Note: *, **, *** indicate significance tests at the 10%, 5%, and 1% levels, respectively.

year. To explain why the different indicators have the same tendency of change, this paper measures their Pearson correlation co­
efficients (see Table 3). We find that the correlation between the four indicators measuring regional disparities is high, and the cor­
relation coefficient between every two indicators is greater than 0.90. This means that there is considerable convergence in the changes
in regional inequality reflected in these four indicators.On the whole, the disparity in the quality of economic growth between cities
shows a declining trend.
Further, this paper counts the types of urban agglomeration distribution1 in 2004, 2011, and 2018 (see Table A2), and specifically
analyzes the spatial distribution characteristics of the differences in the quality of economic growth. Wefind that in 2004, 2011, and
2018, the number of cities with high-high agglomeration has increased, and the number of cities with low-low agglomeration has
gradually decreased. In summary, the cities under the four types of agglomeration distribution remain unchanged, and some low-low
agglomeration cities have transformed into high-high, high-low, and low-high agglomeration types.

3. Research design

3.1. Model construction

This paper constructs a spatial lag model with spatial clustering of financial services as the core explanatory variable:
∑
N
lnHQDit = ρ Wij lnHQDit + βlnAPSit + γlnXit + vi + ηt + (1)
j=1

Among them,iand t are city and year, respectively. The explanatory variable is the quality of economic growth in Chinese cities
(HQDit), and the key explanatory variable is the level of spatial agglomeration of financial services (APSit). We also measure the level of
spatial concentration of productive services as a robustness test. Witis the element in the spatial weight matrix W of geographic
characteristics. Xit represents the set of control variables. vi and ηtare city-fixed effects and time-fixed effects, respectively. The random
error term (εit) obeys a normal distribution with an expectation of 0 and a variance ofσ2I.
At the same time, to investigate whether there is a non-linear relationship between the spatial concentration of financial services
and the quality of urban economic growth, a non-linear spatial measurement model is set up as follows:
∑
N
lnHQDit = α0 + ρ Wij lnHQDit + βlnAPSit + β1 (lnAPSit )2 + γlnXit + (2)
j=1

3.2. Variables and data

The key explanatory variable in this paper is APSit, measured by the value of locational entropy. The calculation formula isLQij =
∑m
Lij / Li,j
∑n ∑j=1
n ∑m wherein iand j represent region and industry, respectively.LQij is the entropy value of location and Li,j is the number
L /
j=1 i,j j=1
L
j=1 i,j

of people employed in the industry jof the region i. The level of spatial concentration of productive services is measured similarly.
The control variables include city size (POP), level of openness to the outside world (OPN), transportation convenience (TRAN), level of
informationization (INF), and degree of government intervention (GOV). The total population of the municipality indicates the city size
at the end of the year. The level of openness to the outside world is measured by the percentage of actual foreign investment in the
city’s GDP (Kong et al., 2020a; Zhang et al., 2019b). The level of transportation accessibility and information technology is measured

1
Among them, high-high agglomeration means that the quality of economic growth in the city is high, and the economic growth level of the
surrounding areas is also high. Low-low agglomeration means that the quality of economic growth of the city is low, and the economic growth level
of the surrounding areas is also low. High-low agglomeration means that the city’s economic growth quality level is higher, while the surrounding
area’s economic growth level is lower. Low-high agglomeration means the city’s economic growth quality level is lower, while the surrounding
area’s economic growth level is higher.

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 Z. Wong et al.
Table 5
SAR model estimation results.
variables Financial services Productive services Financial services Productive services
(1) (2) (3) (4) (5) (6) (7) (8)
Time Fixed Space Fixed Time Fixed Space Fixed Time Fixed Space Fixed Time Fixed Space Fixed

lnAPS 0.105*** 0.087 *** 0.098*** 0.109*** 0.072*** 0.094*** 0.036*** 0.035***
(5.64) (5.89) (5.28) (5.37) (4.30) (4.47) (4.22) (4.12)
(lnAPS)2 -0.001 -0.001 -0.001 -0.001
(-0.29) (-0.42) (-0.36) (-0.35)
lnPOP 0.012*** 0.018*** 0.016*** 0.014*** 0.016*** 0.015*** 0.019*** 0.014***
(3.62) (3.59) (3.85) (3.75) (3.91) (2.41) (0.99) (2.76)
lnTRAN 0.005*** 0.008 *** 0.004*** 0.002*** 0.007*** 0.004*** 0.005*** 0.001***
(3.72) (3.64) (3.45) (3.41) (3.22) (3.49) (3.23) (3.65)
lnINF -0.015*** -0.118*** -0.017*** -0.016*** -0.103*** -0.011*** -0.002*** -0.019***
5

(-2.76) (-2.47) (-2.63) (-2.62) (-2.71) (-2.60) (-2.77) (-2.85)

lnGOV -0.006*** -0.007*** -0.003*** -0.002*** -0.005*** -0.006*** -0.005*** -0.002***
(-2.72) (-2.60) (-2.77) (-2.65) (-2.53) (-2.95) (-2.89) (-2.64)
lnOPN 0.004 0.006 0.003 0.002 0.002 0.004 0.001 0.003
(1.02) (1.25) (1.28) (1.19) (1.13) (1.21) (1.05) (1.09)
ρ 0.116*** 0.121*** 0.117*** 0.117*** 0.104*** 0.107*** 0.102*** 0.109***
(4.73) (4.58) (4.44) (4.45) (4.16) (3.68) (3.86) (4.14)
σ2 0.6178 0.6293 0.6115 0.6112 0.6596 0.6389 0.6085 0.6086
Adj_R2 0.7673 0.7412 0.7549 0.7563 0.7732 0.7490 0.7713 0.7718
Log-L -4379.5 -4350.0 -4259.7 -4270.8 -4539.5 -4371.9 -4249.7 -4262.2
Hausman 22.65*** 22.54*** 22.76*** 22.41*** 22.88*** 22.71*** 22.48*** 22.82***
N 4020 4020 4020 4020 4020 4020 4020 4020

Note: (1) To enhance the robustness of the test results, time-fixed and spatially-fixed were used separately under the spatial lag model. (2) *, **, and *** denote tests of significance at the 10%, 5%, and 1%

Finance Research Letters 43 (2021) 101993

levels, respectively, with t-statistics in parentheses volume.
Z. Wong et al. Finance Research Letters 43 (2021) 101993

Table 6
Resultsofdirect and indirect effects.
variables Financial services Productive services
direct effect indirect effect total effect direct effect indirect effect total effect

lnAPS 0.024*** 0.006*** 0.030*** 0.185*** 0.042*** 0.227***

(3.73) (4.42) (3.09) (5.82) (7.27) (5.38)
lnPOP 0.015*** 0.008*** 0.023*** 0.079*** 0.056*** 0.135***
(3.82) (3.32) (3.17) (4.11) (6.70) (7.57)
lnTRAN 0.008*** 0.006*** 0.014*** 0.067*** 0.044*** 0.111***
(4.08) (4.41) (3.23) (5.79) (8.51) (6.70)
lnINF -0.007*** -0.006*** -0.013*** -0.172*** -0.086*** -0.258***
(-3.85) (-3.10) (-3.77) (-3.91) (-4.35) (-6.05)
lnGOV -0.003*** -0.001*** -0.004*** -0.047*** -0.029*** -0.076***
(-3.41) (-3.15) (-3.20) (-5.76) (-4.33) (-6.28)
lnOPN 0.008 0.001 0.009 0.076 0.016 0.092
(1.15) (1.22) (1.06) (1.07) (0.54) (0.94)

Note: *, **, and *** denote tests of significance at the 10%, 5%, and 1% levels, respectively.

by total freight transport and postal service revenue per capita, respectively. The city’s fiscal revenue expresses government inter­
vention as a percentage of GDP.
Due to the change in the classification of China’s service industry segments in 2003, for the sake of maintaining the consistency of
data caliber, we choose the year 2003 as the base period for this paper. The data mainly come from the China Statistical Yearbook of
cities 2004–2018 and China Regional Economic Yearbook. To ensure data completeness and comparability, a total of 268 cities at the
prefecture level and above are selected as the study sample in this paper. Due to the differences in price fluctuations among regions,
price deflations of capital are carried out using provincial fixed asset investment price indices, which are obtained from the China
Statistical Yearbook.

4. Empirical results

4.1. Exploratory space analysis

This paper first conducts exploratory spatial analysis to test whether the level of economic growth quality in each city is spatially
correlated. We calculate the quality of urban economic growth in China from 2004–2018 to obtain the Moran’s I value (see Table 4).
The results show that the Moran’s I of the quality of economic growth in China’s cities from 2004–2018 all passed the 1% level of the
significance test. Furthermore, the Moran’s I values for the quality level of economic growth in Chinese cities are all positive. This
shows that the 268 Chinese cities have a strong spatial correlation with the quality of economic growth. This leads to the following
inference: the quality of economic growth in Chinese cities affects the quality of economic growth in adjacent Chinese cities. Therefore,
the effect of spatial concentration of financial services on the quality of economic growth in Chinese cities may also be influenced to a
large extent by the geographical distance between cities.

4.2. Baseline regression results

Table 5 shows the regression results of the spatial lag model. From the first row of results, we can see that the coefficient of the effect
of spatial agglomeration of financial services on the quality of urban economic growth is significantly positive.The coefficients ρ in the
spatial lag model using the geographic distance weighting matrix all pass the significance test at the 1% level. This indicates that the
spatial agglomeration spillover effect of financial services between regions is also an essential factor affecting the quality of urban
economic growth.
To verify whether there is a non-linear relationship between the spatial concentration of financial services and the quality of urban
economic growth, this paper adds the squared term of spatial concentration of financial services to the model. The results of the last
four columns show that the coefficient of (lnAPSit)2 on the quality of urban economic growth is negative and does not pass the sig­
nificance test. This means that the positive promotion effect is still dominant in the process of the spatial agglomeration of financial
services affecting the quality of urban economic growth. That is, the concentration level of the financial service industry has not
exceeded the moderate range that the city can bear. At the same time, after the robustness test with the spatial agglomeration of the
producer service industry as an explanatory variable, the results remain stable.

4.3. Decomposition of spillover effects

The above results indicate that the coefficient of the effect of spatial concentration of financial services on the quality of urban

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economic growth is significantly positive. However, the simple point estimation results do not fully represent the marginal impact of
the level of spatial agglomeration of financial services on the quality development of urban economic growth (LeSage & Pace, 2008;
Zhang et al., 2020; Kong et al., 2020b). Therefore, we use the SDM model to decompose the spillover effect (see Table 6). However, due
to space limitations, the regression results of the SDM model are not shown here.
From Table 6, we can see that the spatial agglomeration of financial services can promote the improvement of the quality level of
economic growth in the region. This shows that the spatial agglomeration of the financial service industry can encourage the
improvement of the quality of economic growth in the city through the knowledge spillover effect, scale economy effect, and factor
reorganization effect. The indirect impact caused by the spatial agglomeration of the financial service industry is positive. This suggests
that the spatial agglomeration of financial services in this city promotes the improvement of the quality level of economic growth in
neighboring cities. At the same time, the results remain stable after robustness with the spatial concentration of productive services as
an explanatory variable.

5. Conclusion

Based on the construction of a comprehensive evaluation system for China’s economic growth, this paper uses 268 cities at the
prefecture level and above in China from 2004 to 2018 as a research sample to empirically test the impact of the spatial concentration
of the financial service industry on China’s urban economic growth quality. The conclusions drawn are as follows. First, overall, the
quality of China’s urban economic growth is improving year by year. Although there are differences in the quality of urban economic
growth levels in different regions, the differences in economic growth levels between cities are decreasing yearly. Cities with high
growth quality are mainly located in the eastern coastal areas, while cities with low growth quality are mainly located in the central
and western regions. Over time, there are also internal conversions between cluster types. Second, the spatial agglomeration of
financial services has a more stable and continuous role in promoting the quality of economic growth in Chinese cities. No phase
change will be seen in the short term. Moreover, its direct and indirect effects are pronounced.

Acknowledgements

This work was supported by the National Natural Science Foundation of China (NO. 71303105), the National Social Science
Foundation (NO. 19FJYB039), and Postgraduate Research & Practice Innovation Program of Jiangsu Province (NO. KYCX19_1381;
NO. KYCX20_1286), and Nanjing University Innovation Program for PhD Candidate (NO. CXYJ21-03). We would like to express our
sincere gratitude to editors and anonymous referees for their useful comments and suggestions.

Appendix

Table A1, Table A2.

Table A1
Statistical description of fundamental indicators.
variable name min Max mean Std.

Share of higher population 1.61 2.19 0.01 13.11

Fixed asset investment per capita 18496.52 17575.18 0 164021.30
Technology input intensity 1.19 1.32 0.03 20.68
Education expenditure per capita 380.08 299.38 68.90 3477.76
Advanced industrial structure 0.84 0.42 0.09 5.03
Rationalization of industrial structure 27.77 21.29 0.01 172.05
Investment rate 1.17 0.72 0.12 5.43
Consumption rate 0.61 0.28 0.04 3.84
The ratio of the balance of deposits and loans of financial institutions 2.09 1.03 0.51 13.81
Total factor productivity 1.00 0.07 0.75 1.31
Capital productivity 0.33 0.26 0.04 2.60
Labor productivity 145835.90 68183.01 8688.42 1006547
The average wage of employees 15074.82 4562.08 0 99149.89
Green area per capita 40.30 54.73 0.57 1179.22
Medical services 8.36 8.15 0.72 96.45
Transportation services 0.13 0.28 0 3.58
Energy consumption per unit of output 23.21 16.53 0.08 248
Level of atmospheric pollution per unit of output 7.48 24.70 0.01 1048.27
Discharges of sewage per unit of output 1.35 1.73 0 45.68
Solid waste emissions per unit of output 12.70 15.34 0 188.69

Note: Data from the China Urban Statistical Yearbook, EPS database, etc.

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Z. Wong et al. Finance Research Letters 43 (2021) 101993

Table A2
List of cities by type of agglomeration.
2004 2011 2018

High-high Tangshan, Shenyang, Dalian, Dongying,
Yantai, Weihai, Qingdao, Shanghai,
Suzhou, Nanjing, Hangzhou, Zhenjiang,
Ma’anshan, Wuhu. Tongling, Changzhou,
Wuxi, Huzhou, Jiaxing, Shaoxing, Jinhua,
Ningbo, Xiamen, Guangzhou, Foshan,
Jiangmen, Dongguan, Shenzhen
High-Low Beijing, Shijiazhuang, Harbin, Jilin,
Changchun, Tonghua, Taiyuan, Linfen,
Yinchuan, Jiaozuo, Zhengzhou, Luoyang,
Xi’an, Lanzhou Xining, Chengdu,
Wenzhou, Jingdezhen, Fuzhou, Quanzhou,
Wuhan, Changsha, Guiyang, Kunming,
Liuzhou, Nanning, Haikou
Low-High Jinzhou, Fushun, Dandong, Huludao,
Anshan, Yingkou, Linyi, Lianyungang,
Shaoguan, Ganzhou, Hezhou, Zhaoqing,
Meizhou, Qingyuan, Heiyuan, Jieyang,
Chaozhou, Mianyang, Guangyuan, Bayan
Nur
Low-Low Heihe, Hegang, Yichun, Qiqihar, Jiamusi,
Chifeng, Zhangye, Guyuan, Qingyang,
Dingxi, Tongchuan, Yuncheng, Xingtai.
Handan, Guangyuan, Hanzhong,
Shangluo, Nanyang, Fuyang, Leshan,
Lijiang, Yibin, Zhaotong, Baoshan, Yuxi,
Luzhou, Baise, Hechi, Laibin, Yulin, Loudi,
Yiyang, Shaoyang, Hengyang, Changde,
Huaihua, Luzhou, Zunyi, Guang’an,
Lanzhou
Beijing, Tianjin, Tangshan, Shenyang,
Fushun, Dalian, Yantai, Qingdao, Weihai,
Yangzhou, Nantong, Nanjing, Zhenjiang,
Changzhou, Nanjing, Chongqing Wuxi,
Suzhou, Shanghai, Ma’anshan, Wuhu,
Tongling, Huzhou, Jiaxing, Hangzhou,
Shaoxing, Ningbo, Jinhua, Wenzhou
Harbin, Changchun, Jilin, Chifeng,
Taiyuan, Luoyang, Jiaozuo, Zhengzhou,
Xi’an, Huainan, Wuhan, Chongqing,
Nanchang, Changsha Guiyang, Xinyu,
Fuzhou, Nanning, Foshan, Kunming,
Ya’an, Chengdu, Haikou
Tieling, Fuxin, Jinzhou, Liaoyang, Panjin,
Anshan, Yingkou, Benxi, Huludao,
Zhangjiakou, Wulanchabu, Binzhou,
Rizhao Linyi, Lianyungang, Bayan Nur,
Yancheng, Xuancheng, Huangshan, Lishui,
Taizhou
Heihe, Qiqihar, Yichun, Jiamusi, Suihua,
Daqing, Shuangyashan, Jixi, Hegang,
Tongliao, Baicheng, Qingyang, Dingxi,
Tianshui, Linfen, Yuncheng, Zhoukou,
Fuyang, Jingmen, Yichang, Ji’an,
Meizhou, Hechi, Liuzhou, Ganzhou,
Longyan, Sanming, Nanping, Huaihua,
Zhaotong, Ankang, Shiyan, Weinan
Beijing, Tianjin, Tangshan, Datong,
Baoding, Shijiazhuang, Yangquan,
Shenyang, Dalian, Jinan, Linyi, Qingdao,
Xuzhou, Nanjing, Wuhu, Changzhou,
Wuxi, Suzhou, Shanghai, Jiaxing, Huzhou,
Hangzhou, Jinhua, Wenzhou, Ningbo,
Quzhou, Wenzhou
Harbin, Jilin, Luoyang, Zhengzhou,
Huainan, Nanchang, Lanzhou, Changsha,
Loudi, Fuzhou, Kunming, Qingyuan,
Shaoguan, Nanning, Liuzhou, Guangzhou,
Foshan, Dongguan, Haikou
Tieling, Fushun, Benxi, Anshan, Panjin,
Liaoyang, Dandong, Yingkou, Jinzhou,
Chengde, Zhangjiakou, Bayan Nur,
Cangzhou Hengshui, Lianyungang,
Zaozhuang, Xuancheng, Huai’an,
Yancheng, Hanzhong, Ankang,
Guangyuan, Mianyang, Ya’an, Nanchong
Heihe, Qiqihar, Tongliao, Siping, Yichun,
Hegang, Jiamusi, Shuangyashan, Qitaihe,
Jixi, Tianshui, Pingliang, Yingtan
Hengyang, Longyan, Heyuan, Ji’an, Baise,
Yuxi, Wuzhou, Guilin, Yangjiang, Yunfu,
Zhaoqing, Chongzuo, Jiangmen, Jieyang,
and Ganzhou, Nanping, Hezhou, Heyuan,
Meizhou, Chaozhou

Note: Organized by the author.

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