Interaction Analysis among Industrial Parks, Innovation Input, and Urban Production Efficiency

Abstract

The high-tech development zones engendered by industrial parks reflect policies that rely on city settings to create industrialization through urbanization in China. To understand the effectiveness of such policies, this article regards the city and park as the spatial unit of economic output. The production efficiency of the city and industrial park and their mutual impact are explored through the input of various production elements operating in a specific space. In addition, as innovation is an important factor affecting efficiency, this investigation explores the overall impact of innovation input on the production efficiency of the city and park. The results show that production efficiency realized for large cities has not been as high as was generally expected and that small cities showed modest efficiency gains. Critically, the calculation of production efficiency in this study simultaneously accounts for both input and output, revealing the decreasing returns-to-scale and, in some cases, the production inefficiencies that can be caused by the excessively large scale of the city and park. The high-tech industrial development zone will not greatly affect the production efficiency of the city. However, the precise degree of the park’s impact on the production efficiency of the city cannot be verified. This indicates the presence of other factors that will affect the production efficiency of the city; and innovation input does enhance production efficiency. This investigation uses input for testing. When production yields increasing returns-to-scale, it indicates insufficient input of production elements, and policies encouraging investment of production elements should be strengthened. Production showing decreasing returns-to-scale is connected to excessive input of production elements, and policies governing the input of production elements should be carefully assessed.