The Study Of The Reasons For Industrial Agglomeration In China

Industrial agglomeration which researches how economic activity varies in space,is the most prominent phenomenon in the process of economic development.This paper discusses industrial agglomeration from the new economic geography perspective.Through a review of the core-edge benchmark model and extension,this paper reveals the inherent law of industrial agglomeration from the level of theory.This paper uses the regional economic differences as the research object to verify the theoretical research conclusions.Under the hypothesis of “no-black-hole”,backward linkage attracts firms to produce at concentrated area.Forward linkage then attracts consumers to live at concentrated area because of firms agglomeration,which further expands the market size of concentrated area.And then this will attract more firms choose to produce at concentrated area.Even if there is no external influencing factors,regional differentiation will occur.Industry activities evenly distribute throughout the whole space when the transport cost is high.However,firms will occur “escape” phenomenon when the transport cost is lower than a critical value.And when this happens,there will be a sudden concentration.This will gradually strengthen under the influence of circular and cumulative causation,and finally forms the core-edge structure.Once this structure formed,it will not collapse in a short time because of regional sticky.This article divides China into seven areas,and uses the size of the market,trade freedom and labor mobility as indicators.This paper will use SUR model to test China’s regional industrial agglomeration.Research shows that south China and east China are China’s core industrial agglomeration areas,and north China is a potential one.Northeast China,central China,northwest and southwest regions did not show the phenomenon of industrial agglomeration.From the perspective of the reality,south China and east China area has formed into "black hole",and attract outside enterprises to produce in local,but other areas’ market are occupied.