Spatial Neighborhood Effect Of Institutional Change

The influence of technological revolution on industrial structure adjustment and regional development is obvious, as the security of technological progress and another wheel of social progress, institutional innovation is widely regarded, however, the specific analysis of institutional factors lack a unified framework, and it is not easy to explicit descriptions and quantitative in practice, the results are not prominent. Regional economy spatial interaction and spatial diffusion effect, i.e. the spatial neighbor effect (not just a geographical concept of nearest neighbor, but multidimensional conceptual contiguity), each area are not independent but related, namely regional economy exist spatial autocorrelation. Reviewing the experience of 30 years of reform and opening up in China, the diffusion of the institutional may be more important than institutional innovation, especially in current period of institutional reform and development strategy, so it is need to rethink the spatial processes of institutional changes. Some industrial phenomenon difficult to explain useing a single theory or classical theory, which needs to be integrated analysis, industrial division, industry transfer and regional development should be explain as possible in a unified framework. After reviewing the literature, the paper establishes a "institutional-space-industry" analytical framework, based on the new economic geography and institutional change, sociological theory, from the perspective of "institutional knowledge" and the spatial proximity of multidimensional, and on the spatial and temporal context, which includes spatial and temporal factors, taking into account spatial interaction, empirical analysis of the inherent mechanism, impact level and dynamic change. Using interaction rules to understanding the balance of homogeneity and heterogeneity, broken path dependence and promote new industries, and the regional coordinated development, provide more advice in line with reality.The paper uses the data of 31 provinces and cities of China in 1994-2013, and explains the realistic problem through various dynamic models and comparative analysis. It also finds some conclusions that are contrary to the real situation or previous studies. In the research method, we first set up a institutional variable index system, then through spatial econometric model, which contains institutional substitution variables, with the main line of homogeneity and heterogeneity, focusing on the spatial autocorrelation and the analysis of the three spatial processes of institutional change. The spillover effect of "institutional knowledge" is specifically decomposed into three levels, including inter-institutional, inter-regional, between institutional and industry, and of course, the impact of the first two levels will eventually be implemented into third levels. Regression analysis and non parametric methods are used in each spatial process. Combining of theory and practice, the paper explains the spatial effect of institutional change in the past 20 years in China. Empirical analysis based on the fifth, sixth and seventh chapters, and draws seven main conclusions in the eighth chapter, inspired by this reality, it is need to rethink the institutional factors. Institutional factors (or government) is important, it is "sticky" and path dependence. Nowadays the institutional space is still non balanced development, the importance of institutional factors in the non balanced development performance obviously. Institution is a concept of change, the association interaction institution occurred first at the neighborhood, and depending on neighbor relationship (multidimensional) performance. Therefore, the perfection of institutional design must to consider regional "hardware and software", interregional needs and interaction effects.(1) defining the spatial neighbor effect of dynamic. Analysis the range, intensity and direction of the diffusion of the institutional, using multidimensional proximity model explain institutional change and the diffusion of multi-directional, It seems to be too far distance, large differences, are not conducive to the diffusion of institutional.(2) With the spatial weight matrix, the micro mechanism of the diffusion of the institutional is re-recognized. The role of spatial nearest neighbor effect in the institutional change is further studied. It is proved that the diffusion is a selection process, which is related to the regional differences and the participation of the network.(3) Homogeneity and heterogeneity is a dynamic equilibrium process. It includes four aspects:the dynamic changes of the multidimensional proximity, the possible existence of best spatial distance, the convergence of the spatial club convergence, the dynamic balance of the convergence between the different provinces and cities.(4) the balance between different institutional and different regions. In today’s interdependent world, there are many factors that determine the diffusion of institutions, industries, countries, and each of the main policy areas, external factors are affecting internal policy choice, so should strengthen regional cooperation.(5) the relationship between institutional change and industrial development. In the regional industrial division, the balance of the various forms of the proximity, not to choose the extreme proximity, to find a way to establish a balanced approach is very important. From the time dependence of institutional change on the industrial impact, whether need to face to face communication, that is, the proximity type or distance depends on the stage of the institutional innovation.(6) the contribution of small and medium enterprises and FDI. It is proved that the small and medium-sized enterprise is the main contribution and the absorption of the spillover effect, FDI’s contribution is not as big as it is, or even negative spillover. Therefore, it is necessary to stimulate the inner force and individual creativity, and turn from the main direction of opening to the outside world to inside and explore the way to go out.(7) reconsider the issue of policy and joint impact. Distinguish the common impact and the "Galton problem" found the correlation of time node of the policy to institutional changes.Specific research is divided into the following seven parts, other than the introduction and appendices, which divided into three main parts, including theoretical basis (chapters Ⅱ, Ⅲ), empirical studies (chapters Ⅳ, Ⅴ, Ⅵ, Ⅶ) and extended part (chapters Ⅷ). The paper integrate related literature, forming theory base, building "institution-space-industry" framework, spatial neighbor effect model analysis and measure institution spatial dependence and radiation range (fifth chapter), which could found "hot" domain, then judge spatial Club convergence of specific situation (sixth chapter), and simulate area between institutional convergence on industry agglomeration (seventh chapter), Finally recognize the institutional conditions related to regional development (eighth chapter).Chapter 1 introduction. This part puts forward the research basis, the significance of the study and the relevant hypotheses, and introduces the research methods, the main contents and innovations of this research.The second chapter is the literature review. Reviews the domestic and foreign related research, and points out the existing problems and research trends, and introduces the relevant measurement model and estimation method. The theories involved include the spatial neighbor effect, institutional change and spatial econometrics theory. The institutional field and the social learning theory, the institutional changes theory and the spatial multi dimensional proximity theory, then extended to the spatial autocorrelation theory. The third chapter build a joint framework to understand the overall context.The fourth chapter is the construction of spatial econometrics model. As the basis of quantitative analysis, the relevant institutional index system was constructed, and the variables were selected by the diffusion curve fitting. After comparing and analyzing the 6 kinds of spatial weight matrix, two control variables were selected and the basic regression model equation was established.The fifth chapter is about the spatial measurement of the institutional change. As the fifth and sixth chapters, Moran test and spatial regression analysis were used to determine the scope, intensity and direction of the institutional, and the results were verified by Wilson model and non-parametric model. Among them, the values of Moran I and the Wilson model reflect the strongest radiation intensity, Moran I and regression model coefficient reflect the radiation intensity, Moran I index and regression analysis coefficient of the positive and negative indicates the direction of radiation, and the spline is directly show the intensity and direction.The sixth chapter is about the spatial process of the institutional change:the convergence of the institutional diffusion. Analysis of the mutual influence of the institutional and the inter-regional influence of the institutional. In order to overcome the disadvantages of regression analysis (kernel density estimation), the results show that there exists spatial club convergence, impulse response function and spatial Durbin model further confirmed interaction of institutional, agglomeration model simulate the cluster of specific regions.The seventh chapter is about the spatial process of the institutional change:the industrial relevance of the institutional. Analysis of the impact of the institutional to the industry level, in order to overcome the drawbacks of regression analysis, using the gray correlation analysis. The simulation results of industrial division and agglomeration echoes to fourth and fifth chapters.Eighth chapter conclusion and prospect. To sum up the whole paper, explain the conclusions of the study, put forward some policy suggestions under the conditions of open economy, and put forward the problems and directions for further research.