A0783
Title: Firm to firm supply network, urban agglomeration and firms' structure change evidence from structural model
Authors: ZhiQiang Zhang - NanKai University of China (China) [presenting]
Abstract: Inter-firm network connections and urban agglomeration economies exert a significant influence on firms' total factor productivity. A structural model is constructed in which inter-firm network linkages, agglomeration economies, and their interactive effects endogenously impact firm productivity. Utilizing panel data on publicly listed companies in China spanning the period 2008-2020, it empirically investigates the relationships between inter-firm network ties, urban agglomeration externalities, and firm-level total factor productivity in the Chinese context. The findings reveal that the intensity of inter-firm connections significantly shapes the non-linear relationship between agglomeration economies and total factor productivity. Regarding the underlying mechanisms, price markups and inter-firm synergies in innovation appear to play a significant role, and inter-firm network linkages coupled with urban agglomeration economies further facilitate firms' structural transformation. Grounded in these findings, it puts forward policy recommendations aimed at enhancing firm competitiveness by expanding firms' supply chain networks and bolstering the agglomeration economies of urban clusters.
