Labor Migration, Industrial Transfer And Urban Development

With the development of nowaday economy, the continuous development and improvement of urban and urban system are important driving forces to impact and promote economic development. The central city and urban system are the key factors to improve the competitiveness and economy growth of a region. All the countries in the world have achieved rapid economic development in the process of urbanization, and also faced the various issues brought about by urbanization. China has already entered a period of rapid development of urbanization, and what kind of urbanization pattern China should adopt becomes a controversial topic in China's theory field.Absorbing Marshall's externality theory, Myrdal's circular causality theory, Arthur's path dependency theory and using Dixit and Stiglitz's Monopolistic Competition model, the new economic geography theory establishes a series of models, in which it integrates the increasing returns of firm level and external economies into a general equilibrium framework, so that we can easily study space issues within the framework of mainstream economics. Making use of new economy geography theory, we can explore the emergence, development and differentiation of the cities from the perspective of the endogenous theory, and study the inherent relationships of the urban system evolution and the dynamic process of industrial transfer.In the development process of urbanization, the labours are mobile factors. In order to achieve utility maximization, the labours move to high-income or low-cost regions. In this process, the agglomeration forces and dispersion forces operate simultaneously. The agglomeration forces come from both the attraction of big market in center city to firms, and the saving of living cost by proximity of workers to urban markets. The local market effect and living cost effect form circular cumulative causatity, which prompt labour to agglomerate in urban area. Dispersion forces on the one hand originate from the market crowding effect causing by competition of the frims, on the other hand come from agricultural transport costs and the dependence of agricultural production on land and.In this study, on basis of the traditional theory of industry agglomeration and urban development, the author reviews the new economic geography. In the new economic geography framework, the paper uses market potential function established by Fujita, Krugman and Venables to explain the inherent mechanism for the emergence and growth of a city. The stability of a single city, the conditions to create a new city and the factors affecting urban development are discussed. Then the impact of the limited mobility of labor on urban development is further discussed. The auther takes advantage of new economic geography theory to explain the direct reasons of the industry differences between cities, and tries to find how to reverse the difference. The empirical analysis is based on the data of Yangtze River Delta area.Both the emergence of new cities and the expansion of the original city size are subject to the changes in population size and location decisions of firms and labours. If population is small, the formation of new cities is difficult; if population is large, the existing urban system can easily be destroyed and form a new city. When there are two major cities nearby, if they are not in division of high degree, the competition for resources between the two cities will be very intense.Level of economic development impacts of city size. When the level of economic development is low and the population size is small, if there is a new city, the city's population size and density of industrial activity will be small. With the increase in per capita income, the urban area and population is increasing, and shows the trend to accelerate growth. The original city enhanced its advantage and the stability is strengthened. With the urban population further growth, urbanization appears as the expansion of urban size and the increase of population density in the original city in a period. When the level of economic development is high, the big city-oriented pattern will be the main mode of urbanization.Level of economic development, industrial and agricultural goods transport costs and labor mobility are the key factors to affect the level of urbanization and urban development. With the increase in per capita incomes, urbanization level is increasing, and the speed of urbanization increases and then decreases, while the residents in city live in high-density firstly and then in low-density. With the improvement of industrial goods transport costs, agglomeration forces continue increasing, and urbanization level and urban population density increases. With the transport costs of agricultural products increasing, the disperse forces increase in the process of urbanization. And the city's size, the total urban population and the urbanization rate have emerged as a downward trend. No matter what kind of factors are considered, the limited mobility of rural labor to urban will restrict urbanization and urban development. The larger migration barriers of labour from rural to urban are, the slower the process of urbanization will be.Labor mobility, capital flows, capital accumulation and technology spillover are the direct causes to the difference in cities industry share. Even if labors do not flow between cities, input-output linkages between firms can also lead to industry cluster and the core-periphery structure. The industry agglomeration scale can be adjusted by controlling the trade liberalization and knowledge spillovers with the integration process between the cities. The relative wage difference and tax competition between two cities can promote industry diffuses between the cities. But this kind of diffuse is conditional.By empirical research, Shanghai is the first-degree primate city in the Yangtze River Delta area, but the other primate cities are not very prominent. There are many cities and towns in the middle rank, and the share of the medium and small cities is big. By panel data analysis, industrial goods expenditure share, the trade cost of industrial goods and agricultural products, which are the important variables in new economic geography, have very strong explanatory powers to urbanization of Yangtze River Delta area. And then the impact of the economic development level on urbanization is illustrated by the relationship between industrial goods expenditure share and per capita income.