Industrial Aggreagation and Regional Economic Growth
|School||Zhejiang University of Finance|
|Keywords||Industrial Agglomeration Economic Growth Endogenous Simultaneous Equations Model|
Around the global world, higher degree area of industrial concentration is the fastest growing economies and dynamic regions. Japan’s Tokyo Bay area and in Osaka as the center of the Kansai region to create the account for 70% of GDP;65% of U.S.GDP are created by the San Francisco area and the Great Lakes region;however,in China,the Yangtze River Delta and Pearl River Delta region’s economy are close to 30% of national total.This is enough to illustrate the industrial organization of industrial aggregating is efficient.Then what is the mechanism which industry aggregation is promoting regional growth? And how the regional economic growth to further strengthen the industry aggregation in turn? This will be the problem of this paper tries to explore.At present, the papers about the theory and empirical research on the industry agglomeration and economic growth are so many, but considering endogenous’article is few, and even less in our country . Therefore, this paper bases on the summarization of the theory about industrial concentration & economic growth and domestic & foreign research, the two has been fully re-examined from the perspective of the endogenous. This paper will be divided into six chapters.The first chapter is introductory part. This part mainly introduced the research background, the research significance, the research methods, the main content of the article, also innovation and the insufficiency.The second chapter is the theory review and literature review. This part reviews relevant theories about the industrial concentration and economic growth comprehensively, also gain a comprehensive review, and then sort out the evidence-based literature about the relationship between industrial concentration and economic growth throughout the domestic and foreign.The third chapter is the endogenous interaction between economic growth and industry concentration: a theoretical analysis. This section introduces the cycle of cumulative causation model about industrial concentration and economic growth which created by Martin and Otta Calvino(2001),and accumulated the formula. It is concluded that there are endogenous interaction between industrial concentration and economic growth. The fourth chapter is the measurement of industrial agglomeration and its influencing factors: the industry as an example. This part reviews the concept of industrial aggregation and measurement methods, using the location entropy index measures every province’s industrial aggregation degree, and makes a comparative analysis, and further measure the industrial aggregation degree of the eastern region, central region and western region in our country., and also make a comparative analysis. It is concluded that the industrial aggregation degree of the eastern region is significantly higher than the central and western region’s, but in recent years, the industry aggregation degree trends to be declining, while the Midwest’s has continuously increased. Then this paper analyzes the factors which impact industrial agglomeration of our country, the main factors contain the size of the market demand, traffic conditions, labor supply, investment in fixed assets, human capital, production costs and other factors.The fifth chapter is the industry agglomeration and economic growth: based on the endogenous inspection of simultaneous equations model. This section is mainly to build the simultaneous equations model to analyze the relationship between the industrial concentration and regional economic growth empirically. First to be tested by the whole national samples, and then tested by the eastern, central and western regions which divided from country. The results of the national sample model showed that there are a linear relationship between the industrial concentration and economic growth, also it’s a significant positive correlation. The results of the eastern and central regions model are consistent with the national model’s result, but the western model has opposite views on the question, and this paper analyzes the possible reasons which causing the situation .The sixth chapter is the conclusion revelation and policy Suggestions. According to the above theory analysis and empirical studies, this paper summarized the conclusion and enlightenment, and also put forward the appropriate policy recommendations according to the different conclusions between the eastern ,central regions and western region.The innovation of this paper is mainly embodied in the following respects. First, the paper analyzes the factors which influence our country’s industrial agglomeration, its point out that the size of the market demand, traffic conditions, labor supply, investment in fixed assets, human capital and production costs are the main factors which influence the industrial agglomeration. Second, in the empirical analysis, the paper takes the endogeneity problem between industrial concentration and economic growth into account, and structure the simultaneous equations model based on panel data, then used three-stage least squares (3LS) to estimate parameters.Third, this paper selects every province’s data which from 1999 to 2009 as the research content. In the process of empirical research, not only to study the whole sample’s (country’s) relationship between the industry agglomeration and economic growth, and also the paper divide the country into the eastern, central and western respectively for research, of course, the conclusions are not the same.