Social Sciences in China (Chinese Edition)

No.3, 2013

Externality, Transport Network and the Economic Growth of Megalopolises

(Abstract)

Li Yuwei and Ni Pengfei

This article uses the network analysis tool and the new economic geography theory to modify the neo-classical model of regional economic growth, establishes the economic growth model of megalopolises based on externality and transport network through a differentiation of transaction costs, and uses the 1990-2008 data of some Chinese cities and the VAR model to test it. Our empirical study shows that under the influence of transport network, central cities rely on factor accumulation for growth, whereas peripheral cities are catching up quickly; that the improvement of transport network will accelerate the factor accumulation of central cities; and that when some newly-added factors are reserved, increasing the node clustering coefficient and reducing the transport costs of peripheral cities will promote the application of peripheral cities to externality, promote their economic growth, and facilitate the coordinated growth of central cities and peripheral cities. Therefore, in building the transport infrastructure, equal emphasis should be placed on the linking of central cities with peripheral ones, and of peripheral cities themselves.