Achieving The Dual Goal Of Efficiency And Balance With Economic Agglomeration:Evidence From China

The development of a large country has always been faced with dual objectives of maximizing spatial efficiency and achieving regional balance.For one thing,in order to maximize spatial efficiency of the whole country,it is essential for enhancing production factors to agglomerate at large cities and metropolitan areas,which mainly solves the problem of where to agglomerate.For another,achieving the goal of regional balance means to guarantee the great majority sharing the fruits of development,which requires taking great efforts to reduce the per capita inequality within and between regions.This is about how to narrow regional imbalance.Therefore,the key is that we should make it clear that spatial efficiency and regional balance is parallel or conflicting with each other.That is to say,will spatial efficiency gained from economic agglomeration inevitably lead to regional imbalance?Does realizing the goal of regional balance really need to sacrifice spatial efficiency gained from economic agglomeration?In order to answer these questions,clarifying the relationship between spatial efficiency and regional balance,and how to get a win-win result are the central issues of this research.This research contributes to the literature on agglomeration economics from the perspective that efficiency and equity does not conflict with each other,and it will be a powerful response to the controversy between "people-based" and "place-based"policies.These findings are also helpful to clarify such practical issues as what kind of urbanization path should be taken in China and where to agglomerate.By constructing a multidimensional framework including government,enterprise,labor and urban,this research wants to address the point that agglomeration of economic activities to a few areas with large mark potential is conducive to the overall spatial efficiency of the country,meanwhile,if labor is free to move,we can finally achieve a win-win result between spatial efficiency and regional balance.This path is considered as toward balanced growth with economic agglomeration.In detail,this research has applied four dimensions to demonstrate this point,which includes regional policy,entrepreneurship,migrant population and urban growth.Firstly,this research has sorted out related academic discussions between views of spatially-neutral policy and spatially-targeted policy.It is concluded that spatially-targeted policy,taking regional background into consideration,may lead to the contradiction between equity and efficiency.This finding theoretically suggests that spatially-neutral policy strongly advocating factor agglomeration is more practicable for current China.Secondly,this research has applied economic census data to explore which place is more entrepreneurial in China,and concludes that balanced distribution of entrepreneurship is against the law of agglomeration economy.Conversely,concentration of entrepreneurship in places with large market potential will be beneficial to achieve the spatial efficiency of China.What's more,the estimated results coming from different circles demonstrate that market potential has a significant distance-decay effect on entrepreneurship,and market potential beyond a certain spatial scale will be of harm to attract firm entering.Thirdly,based on the data of migrant population,this research confirms that market potential significantly increases the income level of migrant population,and this positive effect is also applied for the low-skilled migrant.We get a large elasticity coefficient when considering the mi grant population with longer residence time.The policy implications are that large city still has income advantage,and enhancing labor mobility and eliminating the institutional barriers such as Hukou system is urgent and preferred.Fourthly,based on exploring the relationship between market potential,labor mobility and economic growth,this research concludes that labor mobility has both positive and negative effect,which contributes to the economic growth and mitigate the regional disparities owing to market potential.In other words,enhancing labor mobility is essential for achieving the dual objective between spatial efficiency and regional balance.Finally,this research concludes that instead of targeting at the balance of total GDP volume among regions,the optimized policy mix should be combined with"people-based" policy and "place-based" policy,and "people-based" policy is the priority.Based on the conclusion,implementing inclusive population policy for mega-cities and strengthening the effect of metropolitan area and urban agglomeration is particularly critical.