Economic efficiency is the key issue of sustainable development in urban agglomerations. To date, more attention has been paid to the estimates of productivity gains from urban agglomerations. Differing from the previous studies, this paper focuses on the influencing factors and mechanisms of the economic efficiency of urban agglomerations, and check the effects of three different externalities (industrial specialization, industrial diversity and industrial competition) on the economic efficiency of urban agglomerations. The selected samples are multiple urban agglomerations, and the economic efficiency of urban agglomerations includes single factor productivity and total factor productivity. China’s top 10 urban agglomerations are selected as the case study and their differences in economic efficiency are portrayed comparatively. Firstly, a theoretical analysis framework for three different externalities effect mechanisms on the economic efficiency of urban agglomerations is incorporated. Secondly, economic efficiency measurement index system composes of labor productivity, capital productivity, land productivity and total factor productivity, and the impact of various factors on the economic efficiency of urban agglomerations is tested. The results confirm some phenomena (MAR externality, Jacobs externality and Porter externality) discussed or mentioned in the literature and some new findings regarding the urban agglomerations, derive policy implications for improving economic efficiency and enhancing the sustainability of urban agglomerations, and suggest some potentials for improving the limitations of the research.
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