Urban Spatial Connections,Local Government Behavior And Market Segmentation

In the increasingly severe international and domestic context,meeting domestic demand is the starting point and foothold of China’s development,but for a long time,subject to the economic situation of administrative regions,the market mechanism is facing a large regional division,making it difficult to give full play to the potential of Domestic Demand.The report of the Nineteenth National Congress of the Communist Party of China pointed out the importance of breaking the limitations of administrative divisions and promoting the free flow of factors of production between regions.The Fifth Plenary Session of the Nineteenth Central Committee of the Communist Party of China further proposed to establish a new development pattern with the domestic cycle as the main body and the domestic and international dual cycles promoting each other.On March 25,2022,the CPC Central Committee and the State Council issued opinions on accelerating the construction of a unified national market,once again emphasizing the importance of building a unified national market and the path to realization.It can be seen that breaking regional protection and market segmentation and smoothing the domestic cycle are not only the basic support and inherent requirements for establishing a new development pattern,but also the key to expanding domestic demand.Based on this background,it is of great practical significance to study how to reduce the segmentation of the domestic market under the new situation and achieve high-quality economic development.Combing through the existing literature,it is found that the academic community has conducted a lot of research on the causes of market segmentation,and the behavior of local governments is considered to be an important factor in the segmentation of the domestic market,but few literatures have studied the role of urban spatial linkages in shaping market segmentation and local government relations.One of the basic assumptions implied in the study of local government behavior is that local governments are homogeneous,but this does not explain the heterogeneity of local government behavior in life and is inconsistent with the facts.This paper argues that urban spatial linkage is the basic factor causing market segmentation and differences in local government behavior,and the behavior of local governments strengthens the impact of this spatial connection and profoundly affects the process of regional market integration.Based on the above ideas,this paper first defines the urban spatial connection.Urban spatial linkage refers to the longitudinal connection between a city and the provincial capital city,the horizontal connection with neighboring cities,and the boundary connection with the border city due to its inter-provincial junction zone.Compared with previous studies,this definition can more fully reflect the spatial location of cities and their interrelationships by examining urban connections from a single spatial dimension.Secondly,using the data of 284 prefecture-level cities from2003 to 2019,this paper empirically studied the influence of urban spatial linkage on market segmentation using spatial metrology model,and the results showed that the number of neighbors in the horizontal direction and the market segmentation showed an "inverted U" relationship,the number of boundary neighbors in the vertical direction and the distance from the provincial capital and the boundary direction had a positive correlation with the market segmentation,and the spatial spillover of the urban market segmentation had three dimensions of vertical,horizontal and boundary,of which the longitudinal spillover effect was the largest.The study also found regional and urban-scale heterogeneity in market segmentation.Third,the empirical study in this paper finds that urban spatial linkages affect local government behavior and spillover,and local government behavior and spillover affect market segmentation through urban spatial linkages.Finally,based on the empirical research results,this paper proposes the following countermeasures: First,in view of the large division caused by the vertical connection of cities,it is necessary to actively cultivate and develop provincial sub-central cities,and add new economic growth poles to promote the development of peripheral cities and regional market integration;secondly,in view of the differences in urban and local government competition behavior brought about by urban-level linkages,administrative divisions should be adjusted in a timely manner,and urban distribution areas can consider appropriately abolishing merged prefecture-level cities and reducing overlapping shadow areas.Areas with sparse urban distribution may consider appropriately adding new prefecture-level cities to strengthen urban level ties and enhance local government competition incentives;third,in view of the problem of high market segmentation in provincial junction areas,we should accelerate the construction of inter-provincial urban agglomerations,break through administrative divisions,change the location disadvantages of border areas into advantages,and achieve industrial complementarity and economic cooperation in a larger spatial scope;finally,increase the central government’s fiscal transfer payments to local governments and guide local governments to optimize the structure of fiscal expenditures.Local governments are encouraged to improve infrastructure,especially at urban junctions,to achieve smooth roads and market connectivity.In addition,we will improve the assessment and evaluation system for local officials,take local government cooperation as one of the assessment contents,guide local governments to achieve positive interaction on the basis of mutual benefit and win-win results,and ultimately promote the integration of inter-provincial and regional markets and achieve coordinated regional development.