A Research On Industry Agglomeration And Its Evolution Based On The Perspective Of Life Cycle

Since the Reform and Opening in 1978, China’s regional industrial pattern has undergone dramatic transformations due to the interactions of four groups of forces that are intertwined with each other, namely, globalization and localization, informatization and networking, decentralization and marketization, industrialization and urbanization. On the one hand, they promote the agglomeration degree of China’s industries in the temporal dimension. On the other hand, they accelerate China’s manufacturing industries to concentrate in the eastern coastal regions in the spatial dimension. The core research objective of this thesis, therefore, is to answer why China’s industry presents continuous agglomeration and evolution in the both temporal and spatial dimensions. Differing from the existing literature, which mainly emphasizes the external influencing factors of industrial agglomeration, this study instead attempts to explore the internal features and forces within industrial agglomeration itself.Through literature review, three research gaps in existing research were identified. a) The studies on agglomeration externalities:Current studies are much dominated by the analysis based on a static perspective while those characterized by dynamic perspective are relatively rare. Researchers apply different methodologies in various research regions and industries and generates different conclusions on agglomeration externalities. One possible explanation for this difference is that they ignore the inherently changing features of agglomeration externalities themselves. b) The studies on agglomeration evolution:Despite that there has been a large body of literature theoretically and empirically analyzing industrial agglomeration at different levels, needed is a more systematic approach that incorporates factors across the macro-level, meso-level and micro-level. Particularly, very little attention has been paid to the role of spatial scale and organization scale in the evolution of industrial agglomerations. However, the scale does have impacts on the evolution of industrial agglomeration in reality. c) The studies on ’agglomeration’ and ’cluster’:Some scholars use these two notions differently while others consider them the same thing. This ambiguity renders scholars not able to dialectically appreciate the similarities and differences between the two concepts.In response to these gaps, this thesis aims to contribute the literature in the following three aspects, a) Proposing a systematic theoretical framework:Through theoretical discrimination and conceptualization, a systematic theoretical framework was proposed. It covers macro-, meso- and micro-level, and takes the "two dimensions (time and space)-two attributes (scale and network)-three carriers (region, industry, and firm)" as its core pillars for analysis. b) Taking scale into account in agglomeration evolution:The impacts of time and space, as well as scale and network, on agglomeration evolution were examined and the results proved that scale affects the evolution of agglomeration. c) Dialectically discriminating and linking ’agglomeration’ and ’cluster’:By scrutinizing the differences and similarities among ’agglomeration’, ’cluster’, and ’proximity’, this research contends that agglomeration is the prerequisite of the emergence and development of clusters while a cluster is the advanced form of spatial organization of agglomeration. Furthermore, based on the conceptualization of agglomeration dynamics, an evolution model of agglomeration life cycle was put forward and its characteristics in different phases were presented.Applying the framework, the study investigated the agglomeration evolution at the macro-, meso-, and micro-level respectively. At the macro-level, the author used panel data of China’s manufacturing industry (1985-2011) to examine the dynamic features of agglomeration externalities, which leads two findings:a) From a long-term perspective, the effects of agglomeration externalities are characterized by constant changes. Besides, there are differences in their dynamic tendencies and characteristics among different industries, indicating that industrial heterogeneity exercises influences on the dynamics of agglomeration externalities. b) Regarding the agglomeration externalities of different manufacturing industries, significant differences were also found in their dynamic tendencies and characteristics. Specifically, the MAR externalities of most industries follow an invert "U" form; the Jacobs externalities of most industries, however, do not demonstrate evident features of dynamic evolution. As for the Porter externalities, although their dynamic features of most industries are significant, no consistent patterns were found among different industries. Instead, they contain features of both linear and non-linear dynamics.At the meso-level, from the perspective of industry life cycle, panel data of China’s manufacturing industry (1985-2011) was used to investigate the characteristics of agglomeration externalities in different phases. The main findings are summarized as follows:a) As the industries grow from development phase to maturity phase, the positive effects of MAR externalities rise and reach their peaks in the late maturity phase. b) On the contrary, the positive effects of Jacobs externalities decline as the industries grow from development phase to maturity phase, and they turn negative in the late maturity phase. c) The regression results of Porter externalities are not significant, but the regression coefficient presents a gradual declining trend. Porter externalities turn out to be counterproductive to industrial development in the late maturity phase.At the micro-level, this thesis uses Jiangyin’s manufacturing industries as a case study. Based on the first-hand and second-hand data acquired from fieldwork and in-depth interviews, this study explored the reasons why industry agglomeration emerges in a specific local and the micro-dynamic mechanisms (local contexts) of agglomeration evolution. Three findings are presented here:a) The specific historical factors exert a profound influence on the industry agglomeration in Jiangyin. The spatial agglomeration of Jiangyin’s textile and garment industry, for example, is jointly shaped by the pre-existing local traditional industries (industrial conditions), the development of township enterprises (institutional background) and the changes of internal and external environment (e.g. policy environment). b) Since China’s Reforming and Opening, Jiangyin’s textile and garment industry has gone through four different phases respectively:’decentralized development’,’centralized agglomeration’,’networked agglomeration’ and ’clustered agglomeration’. This demonstrates the applicability of the agglomeration life cycle. c) The micro-dynamic mechanism that drives the constant evolution of industry agglomeration consists of three aspects:the entrepreneurship fostered in specific local contexts; the industry agglomeration constrained by path dependence; and the firm networks constructed under the forces of multidimensional proximities.To conclude, this thesis suggests:a) At the provincial level, the dynamic process of industrial agglomeration and decentralization should be taken into account, and provincial industrial transfers should be treated objectively. b) At the industry level, more attention should be paid to phased effects of industry life cycle, thus, the organizational form of industry agglomeration could be cultivated rationally. c) At the local level, policy makers should consider the differences of local contexts where the industrial agglomerations embedded, in order to promote the development of industry agglomerations accordingly. d) From a system perspective, scale and network features of industrial agglomeration should not be ignored, and a comprehensive understanding of the possible effects of scales on industrial agglomeration is needed.