A novel method to approximate intercity networks and its empirical validation

Abstract

A network perspective has increasingly become an organizing paradigm for understanding regional spatial structure. This paper begins with a critical overview of existing empirical models for estimating intercity networks based on corporate linkages. Extending a recently proposed primary linkage algorithm by Hennemann and Derudder, this paper advances a new method for approximating urban network with locational strategies of firms. The new method considers both regional and hierarchical network features, and avoids information loss that is typical for the conversion between two-mode intercity corporate networks and one-mode intercity networks. In addition, networks estimated by the new method are suitable to be used with social network analytics. The newly proposed method is empirically validated with intercity corporate networks formed by advanced producer service (APS) firms in China's two largest metropolitan regions: Yangtze River Delta (YRD) and Pearl River Delta (PRD). The empirical analysis suggests that (1) in contrast with conventional methods (e.g., the interlocking city network model), our new method would produce regional and hierarchical urban networks that more closely resemble the reality; and (2) the new method allows the effective use of social network analytics such as betweenness and closeness centralities. Nevertheless, the authors note that the validity of any approximation methods for urban networks depends on the soundness of underlying assumptions about how network actors (firms, in our case) interact with each other.