| Along with the development of industry agglomeration, regional difference is also continuous changing in our country, and has shown a disharmony situation in the development process. The Core Periphery Model of Krugman indicates that industry agglomeration exits an equilibrium level, otherwise there will be the opportunity to ameliorate the resource distribution. On the basis of theoretical research, this paper to the empirical relation between industry agglomeration and regional difference carries through hypothesis and certification, on the one hand, the research complements the indicators measurement and analysis methods in this field; on the other hand, which also enriches the relevant theoretical research, and puts forward some measures aiming at reducing regional difference.This paper is divided into six chapters, the specific structure and content as follows:Chapter 1:introduction.First, putting forward the issues and the meaning of research; Second, introducing present researches in domestic and international, pointing out the inadequacy and the improvements of existing research; again, combining with the framework of this paper, binging forward the corresponding research ideas and methods; Finally, illustrating the main innovations and shortages in the paper.Chapter2: general introduction to industrial agglomeration and regional difference theory. First defining some basic concepts, such as industry agglomeration, industry agglomeration equilibrium and un- equilibrium, regional difference; then introducing some descriptive indicators about that, such as Concentration Ratio, Herfindahl—Hirschman index, GINI coefficient and Theil coefficient; and summarizing the theories, which are mostly the equilibrium model of Krugman and the theory of regional difference; Finally, putting forward five hypothesizes to the relationship between industry agglomeration and regional difference, and the hypothesizes lead the development of the whole article.Chapter3: equilibrium research on industry agglomeration in our country. The level of industrial agglomeration has a right level, this chapter from the angle of industrial organization, relying on previous dynamic non-equilibrium model of industrial agglomeration, using economies of scale variables, market demand variables, capital demand variables, product differentiation variables, present and lag period level of industry agglomeration to construct regression model, at last, the regressive results show that the level of industry agglomeration in our country is in a un-equilibrium level, the adjusting speed of industry agglomeration level represented by 20 industries to the long-term equilibrium is 20 years also, and the adjusting speed is consistent with the western countries.Chapter4: "Matthew Effect" in industry agglomeration of our country. The level of industry agglomeration in our country is in un-equilibrium level, which must bring the waste of resources and efficiency losses. This chapter uses panel data, including industry agglomeration and region difference level in eight regions, and by a series of recognitions and tests, the analysis results show that the un-equilibrium level of industry agglomeration is the Granger cause of regional difference widening, and the relation between that meets "convergence hypothesis" of "Matthew Effect" within the region, which indicates that the high level of industry agglomeration will lessen the regional difference in regional interior, but the relation between that meets "divergence development" between all regions. This chapter also indicates that the level of industry agglomeration is Pareto state in China's eastern coastal regions.Chapter5: test on industry agglomeration power and decentralization power in our country. This chapter begins from the theory analysis about affecting industry agglomeration' un-equilibrium; empirical analysis is the other angle, and empirical tests are from two perspectives, one is by ARMA model to analyze the relation between variables, and gets the orientation and degree of each variables; another is by VAR model to test the dynamic characteristics, and analyzes concretely the size of impulse and contribution degree of each variables. The main conclusions are: transportation factor and input factor within the region, input factor from the exterior regions, market demand factor, above three factors' changing direction is the same with the industry agglomeration, but the message population factor is in the opposite direction; in the same time ,the impulse degree and variance contribution of each variables to the level of industry agglomeration are different.Chapter6: measure in industry agglomeration level and research on Countermeasures of closing region difference in our country. The chapter analyzes the agglomeration industries and regions firstly, and then analyzes the relative comparative advantage industries, at last, puts forward concrete Countermeasures aiming at closing region difference in our country.At last, the article draws a conclusion. The primary conclusions of this article include:1 .The un-equilibrium level of industry agglomeration in our country: the level of industry agglomeration is in un-equilibrium level, the range includes all regions, and the agglomeration state is in the adjusting process to the long-term equilibrium level. The adjusting speed of industry agglomeration level represented by 20 industries to the long-term equilibrium is 20 years also, and the adjusting speed is consistent with the western countries.2.The negative contribution of whole industry agglomeration level to regional difference: the higher of whole level of industry agglomeration, the greater of whole regional difference, the relation between that is clearly positive, and which accords with the "development divergence" of Matthew Effect;3. the positive contribution of industry agglomeration to regional difference in region interior: the Granger causality relation of long-term or short-term is exist between industry agglomeration and regional difference in region interior, and the higher of industry agglomeration in region interior, the lower of regional difference. Obviously, the relation between that meets "convergence hypothesis" of "Matthew Effect" within the region, and indicates that the high level of industry agglomeration will lessen the regional difference in regional interior.4.The level of industry agglomeration is Pareto state in China's eastern coastal regions: our country's eastern coastal regions is the most efficient to industry agglomeration, and it represents the best agglomeration scale and level in our country, other regions comparing with the eastern coastal regions are waste or deficiency in industry agglomeration, further, the northeast regions, the southern coastal regions, the southwest regions and the northwest regions are existing the question of waste industry agglomeration, and the northern coastal regions, the middle Yellow River regions and the middle Changjiang regions are existing the question of deficiency industry agglomeration.5.The article finds some results from the difference decomposition of eight areas: the regional difference is further increasing in population, the main reason is that the average difference between regions is enlarging; the difference between the coastal regions is significantly high to other regions, and the northern coastal regions is the best; the average interior difference of eight areas is to decrease, but all the regions does not meet the strict convergence on specific regions, three regions, namely the northern coast regions, the eastern coastal regions and the middle Changjiang regions, are rapidly shrinking in internal difference, but the southwest regions is rapidly increasing.6.Transportation factor and input factor within the region, input factor from the exterior regions, market demand factor, above three factors' changing direction is the same with the industry agglomeration, but the message population factor is in the opposite direction. Namely, the former three factors play promoting industry to further agglomerate, and the last factor plays promoting industry to disperse, the latter result is contrary to hypothesis 5.Of course, the conclusions of this article needs to be confirmed by the correlative theories and practice in future.Finally, since lots of content in this article is a maiden attempt and the ways and means of the research maybe limited, it is inevitable that anything important is ignored or anything wrong. So any suggestion or comment is welcome, thank you in advance.
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