The Effects Of Industrial Agglomeration On Sophistication Of China’s Manufacturing Exports

After the reforms and opening-up of the country,our manufacturing industry is growing rapidly and becoming the "factory of the world" thanks to the "demographic dividend",natural resources and other advantages.Now it has become the world’s largest manufacturing nation.Nevertheless,the manufacturing power does not necessarily represent the manufacturing power.As an effective form of spatial organization,industrial agglomeration can reduce the production cost of enterprises and promote the internal knowledge spillover by giving full play to the external economies of scale and talent agglomeration effect,so as to improve the technological innovation level and core competitiveness of enterprises.So,it is of great practical significance to explore the effects of industrial agglomeration on sophistication of China’s manufacturing exports.Firstly,this paper estimates the export technology sophistication,domestic export technology sophistication and industrial agglomeration of China’s manufacturing industry and 12 sub-sectors using a method based on the entropy of production processes and location,and examines the current situation of manufacturing agglomeration and export sophistication in China.Secondly,the impact of industrial agglomeration on export sophistication is analyzed theoretically.It is found that industrial agglomeration can promote import and export sophistication by producing FDI spillover effect,human capital agglomeration effect,scale economies effect and promoting economic growth.The paper then selects panel data for 12 sub-sectors of Chinese manufacturing industry for the period2003 to 2014 and constructs a two-way fixed effects model to analyze the impact of industrial agglomeration on export sophistication from a mathematical perspective.The empirical results show that the impact of industrial agglomeration on manufacturing export sophistication is significantly positive.After the regression of manufacturing industry by industry technology level and scale,the effect of the degree of industrial agglomeration on export sophistication is found to show signs of industrial heterogeneity and the effect of the degree of industrial agglomeration on export sophistication for large industries and medium to high tech industries is significantly positive.Based on the results of studies on the impact of industrial agglomeration on export sophistication and the actual situation in China,this paper puts forward the following policy suggestions: First,industrial agglomeration should be guided reasonably and industrial layout should be planned;Second,we need to create a sharing platform within the cluster to facilitate exchange and collaboration between companies.Thirdly,we need to introduce foreign capital in a reasonable way and carry out cooperation in high-tech fields.Fourthly,the intensity of R&D investment should be improved to promote the competitiveness of cluster enterprises.