The financialization of urban development and urban labour productivity: evidence from China

ABSTRACT

This study examines the impact of the financialization of urban development on urban labour productivity. We identify that there is an inverted-‘U’ relationship between the financialization of urban development and urban labour productivity in China. A further investigation shows that the financial resource mismatch and alleviating of financing constraints underpin such an inverted-‘U’ relationship. Our conclusions are robust to a number of robustness checks. Finally, we also find that the financialization effect is stronger in less developed regions, and lower after 2008. This study demonstrates that the financialization of urban development could play complex and time-varying roles in an economy.

KEYWORDS:

• financialization
• urban development
• labour productivity
• urban governance
• China

JEL:

• O11
• R51

ACKNOWLEDGEMENTS

The authors thank the editors and anonymous reviewers for their valuable comments. The three authors all contributed equally to this paper.

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Additional information

Funding

The authors are grateful for financial support from the National Natural Science Foundation of China [grant numbers NSFC71974125, NSF71661137004 and NSF71573166] and the Master of Accounting Education Innovation Project in the Artificial Intelligence Era of Shanghai National Accounting Institute [grant number SNAIYJS213001].