Impact of Administrative Division Adjustments on Urban Shrinkage: Evidence from Chinese Counties

Abstract

Numerous shrinking cities have emerged in the new development stage of China, and the authorities have tried to adopt the policy pool of abolishing counties and establishing districts to alleviate urban shrinkage. This study uses urban nighttime light data from 2010 to 2017 to determine whether the policy is effective in a Difference-in-Difference model framework. We find that China's urban shrinkage shows a shrinkage–expansion cycle, and the policy of removing counties and establishing districts has a significant effect on the population of the counties, which indicates that the policy can ease urban shrinkage. Specifically, the positive effect is stronger for counties belonging to cities with higher administrative rank, and for cities located in the East region and Southwest region. Our study has great practical implications for the governance of shrinking cities and promoting sustainable urban development.