Polarization or convergence: Strategy of reshaping economic geography of large countries: A cross-country study on the evolution and determinants of city size distribution

There is a debate on whether spatially-neutral or spatially-targeted policy is a better strategy for the future development of economic geography and the spatial pattern of urbanization at the national scale. Economists emphasize the spatially-neutral policy and advocate for the free flow of production factors to the developed regions in southeast China, while economic geographers support the latter and the development of central and western China. We argue that the radiation radius of an economic hub is not limitless because of geography, more precisely, it is distance that plays an important role in the distribution of production activities and urbanization. We also believe that not only should economic benefits be taken into account, but also other factors such as politics, ethnic minority and national security. The core point of this paper is that the scale of a nation is the key determinant of the spatial layout of economic geography and urbanization, and larger countries should follow a relatively balanced development path. Based on both cross-sectional and fixed-effect panel models, we explore the relationship between the scale of a nation and city size distribution, the proxy for the spatial pattern of national economic geography. The results show that, (1) all else being equal, the scale of a nation, represented by either population or land area, is positively associated with a balanced city size distribution. That is, the economic geography in large countries is inclined to a spatially balanced layout; (2) a nonlinear relationship is identified between the spatial pattern of national economic geography and per capita GDP. That is, national spatial pattern is unbalanced at lower levels of economic development and evens out at higher levels of development; (3) urbanization, industrialization, and a stable political environment also help balance the national economic geography layout. This study's policy implication is that large countries such as China should implement the strategy of a relatively balanced development of economic geography and urbanization. Considering the objectives of national security, social stability, and the fact that China has a large population and a vast territory, it is reasonable for China to promote the development of the central and western regions with spatially-targeted policies.