Research On Upgrading Of Industrial Clusters In The Background Of Industrial Relocation

Changes of independent development pattern between central and western regions and the coastal parts can not only promote regional economic integration and linkages, and expand domestic demand and narrow the gap between diffeent regions, but also are the urgent needs of tansisition the of economic development mode. In the context of economic globalization and development of information technology, international and interregional industries shift rapidly developed. As a form of network-type industrial organization between markets and enterprises, industrial clusters have become the importance of the regional carrier to promote China's export-oriented economic development and industrial competitiveness enhance. With the expansion of international and interregional industrial relocation, what is the impact of industrial relocation on upgrading industrial clusters in different regions? Zhejiang and other relatively developed eastern regions will appear hollowing out of industries? What is the driving force and mode of industrial relocation? How to upgrade local industrial clusters of eastern regions in the context of industrial relocation? This paper focuses on these issues on the upgrading of industry cluster and industrial relocation. To answer these questions which are highly related with policy issue, we need to do empirical study and case study based on solid theoretical foundation.Through theoretical analysis and empirical research, this article got the following conclusions:(1) Cluster effects and sunk costs led to the stickiness of industrial relocation; which will greatly affect the viscosity of industrial clusters upgrade. The path of industrial relocation and local industry cluster upgrading is determined by the evolution of its comprehensive comparative advantage. Because different regions have different industrial structure and various elements of resource and environmental constraints, the different evolutionary path will differ greatly in the future. Integrated evolution of comparative advantage and industrial clusters upgrade path is not necessarily linear and continuous, often engendered nonlinear evolution, in the process of the upgrading, the realization is likely to be a "bifurcation". Empirical research shows that:the stickiness of industrial relocation has a significant positive impact on industrial cluster upgrade; and this is because the current phase characteristics of reaction on industrial relocation. Now our country has no real face on Lewis turning point situations, so cluster effects with positive labor attraction function are significant for the stickiness of industrial relocation, while the sunk cost effect is not due to a significant negative impact, but joined the one-year lagged value of the patent in the regression model, the industrial relocation effect is still positive but already not significant statistically. This shows that from the perspective of long-term dynamics, the stickiness of industrial relocation due to cluster effect is weakening, while stickiness of industrial relocation resulting from the negative effect of sunk costs will be more obvious, and thus speed up the upgrading pace of industrial clusters in Zhejiang. Also, in addition of significant effect of the financial sector, the logistics industry as a typical representative of the development of producer services is still insufficient to support the effective upgrade of Zhejiang cluster. We should develop producer services such as logistics, finance, marketing control systems and cultural and creative industries, especially the service outsourcing industry, to support effective upgrade of industrial clusters in Zhejiang.(2) Industrial relocation has multi-level economic subjects with different economic initiative and adaptability. Under the current institutional environment in China, the behavior of enterprises and local governments in industrial relocation are often trapped in a "prisoner's dilemma", one of the important reasons is the emphasis on economic growth-oriented performance appraisal system and term limits. From the view of long-term trend, regional cooperation is rational and necessary for promoting coordinated regional development and achieving inclusive growth. However, only the central government's industrial relocation policy is not enough, we also need to develop specific models and mechanisms for coordination of regional industry, and a series of institutional innovations can improve the effect of industry relocation policy, to achieve the goal of industrial structure adjustment and optimization. From the national level, regional industrial relocation has not yet appeared quick development trend across administrative areas; the province scope is still the mainstream relocation area. China's industrial relocation is often due to increased transaction costs within the enterprise or the adjustment of national policies, and changes of labor and land prices, market demand and environmental regulations. Large rural population base and huge rural surplus labor in China is still the long-term trend, "Lewis turning point" has not substantially come, because China still exist differences on factor prices and labor productivity between regions.(3) The dynamic evolution of industrial cluster has its inherent laws as a complex nonlinear system; path dependence in the cluster development may lead to the lock or the decline of industrial clusters, the stability of the industrial clusters is very important. In linear space, Cournot competition between firms will lead to spatial concentration; while Bertrand competition between firms will lead to relocation of some firms. A higher level of product differentiation can reduce the price elasticity of demand, reducing the intensity of competition; promote upgrading of industrial clusters to achieve effective and sustainable development. The induced demand for producer services driven by the diverse needs of consumers within the industry cluster can increase the production of collaborative enterprise efficiency, and the development of the service industry can support the production of industrial clusters upgrade. From an evolutionary perspective, because a serious lack of resources in Zhejiang, Zhejiang Province already become the most typical area of industrial relocation, the comparative advantage of Zhejiang lies in its comprehensive system innovation and mechanism innovation. Empirical analysis shows that most of the manufacturing sectors in Zhejiang are very competitive. Overall, Zhejiang cluster relocation has become the trend, but the industrial stickiness is very obvious. Cost factors and market factors are the two leading factors of industrial relocation of Zhejiang; industrial relocation approaches is more diverse, but are mainly incremental relocation. From the view of industrial undertaking such as Anhui Wanjiang side, the main relocation subjects include not only domestic firms, but also many foreign-invested enterprises, indicating the development mode of export-oriented economy in eastern regions may be replicated to the central and western regions. The existing reseaches on upgrading of industrial clusters mostly focused on competitiveness and global value chain framework, with less to carry out systematic analysis of industrial relocation. This paper firstly defined the relevant concepts clearly, proposed a theoretical framework of evolution of comprehensive comparative advantage based on industrial relocation and industrial clusters upgrading combined with China's national conditions. And we analyzed the dynamic evolution of industrial clusters and two-level game path of firms and the local government in the industrial relocation, then based on econometric tests and field study in Zhejiang and Anhui Wanjiang areas, we answered the driving force and mode of industrial relocation, and the specific impact on industrial upgrading. Finally we proposed policy initiatives to promote industrial clusters upgrading and implementation of industrial relocation orderly.