A Study On Declining Cluster And Total Factor Productivity

This paper focuses on the impact of declining clusters on total factor productivity of firms.Further,we divide declining clusters into local declining clusters and declining clusters in neighboring regions,and the impact of clusters is divided into direct effect and moderate effect,which leads to the specific research in this paper: How will the size of the local declining cluster directly affect and moderate the total factor productivity of all local firms? And how will the size of the declining cluster in the neighboring region directly affect and moderate the total factor productivity of all local firms?This paper draws on the China Industrial Enterprise Database(CIED)from 1998 to 2007 published by the National Bureau of Statistics of China.We use data about all Chinese state-owned industrial enterprises and all non-state-owned industrial enterprises whose annual prime operating revenue was over than 5 million Chinese Yuan.This paper employs the multivariate linear regression equation method and the moderate effect of the recessive cluster.The study finds that,first,the relationship between firm size and total factor productivity of firms is a significant positive correlation.This finding is not new,but it lays a solid foundation for further testing of multi-cluster effects.Second,firms age is negatively correlated with total factor productivity,and ownership is also negatively correlated with total factor productivity.In China,state-owned enterprises have lower productivity than private enterprises.These two results are significant in all the models in this paper and are consistent with previous research results.Third,this study confirms that the real world is made up of geography and time.This paper traces the geoscientist's point of view by introducing the two dimensions of "space" and "time".The spatial dimension focuses on geographical proximity,study neighboring regions and the time dimension mainly focuses on the declining stage.The multi-cluster perspective reflects the reality of cluster interactions: the behavior of one cluster may affect the performance or output of another cluster,and such influence may be complementary or competitive.As can be seen from this study,on the one hand,specialized industrial cluster A may have an impact on the firms in specialized industrial cluster B.On the other hand,in addition to the direct impact,multi-cluster itself has formed a special environment that changes the behavior and performance of the firms.The study found that the impact of declining clusters on the total factor productivity of local firms is similar.Further,this paper illustrates the impact of a declining multi-cluster environment on TFP on firms in two aspects: direct effect and moderate effect.An interesting finding is that the direct effect of the declining multi-cluster environment on TFP of firms is positive and the moderate effect is negative.In summary,when we study how clusters affect TFP of firms,considering space and time constraints such as knowledge and labor pooling,we have enriched our understanding of cluster phenomena.Finally,for regression results,there are some issues of the declining cluster affecting the TFP of local firms need more discussion,regardless of whether the declining cluster is local or adjacent.This means that when a cluster “decline”,it becomes a “resource provider” that benefits both local and neighboring regions.At the same time,a relatively negative and unfavorable production environment will be formed around the declining cluster.The former is the direct effect and the latter is the moderate effect.And we always think that the direct effect is greater than the moderate effect,because the direct impact of resource flow will always be higher than the indirect impact of the environmental atmosphere.The contribution of this research lies in both theory and practice.On the theoretical contribution,we have a solid micro foundation in the study of a more macro multi-cluster perspective.This study provides two dimensions of “time” and “space” for the research of multi-cluster perspective;in the aspect of research object,we not only focuses on the impact of cluster exerts on the performance of a single specific firm,but also extends to other cluster firms in the region;in the aspect of research effect,we not only consider the direct effect of the declining cluster on performance of firms,but also consider the declining cluster as a moderate variable to study its role as the external environment,which greatly enriching the theory of multi-cluster.On the practical contribution,the study of the declining cluster is of great significance to the current elimination of outdated production capacity in China.Under the background of China's current industrial transformation and upgrading,the study of the impact of the declining cluster will help us make more scientific decisions when adjusting and optimizing the industrial structure.