Research On The Effect Of Manufacturing Industrial Agglomeration On Regional Income Disparity In China

Since the re form and opening up, China’s econo my has achie ved unprecedentedrapid develop ment, but the income gap that plagued our country has never beensolved. At the same time, the ma nufacturing ind ustrial a gglo meration in China isincreasingly significant, and gradually forms the core-periphery structure. This thes istries to exp lore the relations hip between these two pheno meno ns, and looks for thepossib le geospatia l expla nation for the widening regio nal income gap in China inorder to provide a theoretica l basis to optimize the manufacturing industryagglo meratio n, reduce regiona l inco me disparities.This thes is aims to make an in-depth research on how the manufacturing industryagglo meratio n affects regiona l inco me gap in China. Firstly, we use the economicgrowth model and the Ha milto n function to build a theo retical model, and ana lyze themanufacturing industry agglo meration factor, institution factor as well as techno logyand the growth rate of labor force’s influence on the regional income gap through thegenera l equilibrium and comparative static analys is. Furthermore, the trajectory fro mthe initial no n-equilibrium state to the stable saddle equilibrium point andagglomeration factor’s impact on the speed of economic convergence are alsodiscussed. The results show that there is an optima l scale for manufac turing industria lagglo meratio n leve l, too high or too low are disadvanta geous to the economicdeve lopme nt, and in the moderate range, the rais ing leve l of the ma nufacturingindustria l agglo meratio n can shorten the time o f economic convergence, na me ly toaccelerate the speed that the backward regions catches up with the deve loped areas.Secondly, an e mpirica l ana lys is on the relations hip between the ma nufacturingindustria l agglo meration a nd regiona l inco me gap is made. We build the static anddyna mic panel data models to exp lore how the manufacturing industria lagglo meratio n and its interaction terms with institutiona l variab les such asgovernme nt intervention, politica l and le gal sophistication and econo mic opennessaffect China’s regional income disparity based on the Chinese manufacturingindustry’s data from1999to2010. Three regions and the whole country are utilized tobuild the mode l. The result further confirms the existence of optima l scale formanufacturing industria l agglo meratio n leve l. The spa tia l distribution differe nce inmanufacturing sector at this stage not only does not expand the regiona l income gap, but will he lp narrow the inco me gap between the three regions, while the institutiona lvariables’ influences on different areas are not the same. Finally, combined the actualsituation of China’s regio na l economic deve lopment a nd the research results, we putforward some polic y recomme ndatio ns on how to optimize the ma nufacturingindustry’s spatial distribution and to promote the coordinated development of regionalecono my.