Research On Producer Service Agglomeration In Perspective Of New Economic Geography

New Economic Geography (NEG) represented by Paul Krugman provides a new interpretation of industry agglomeration, combining factors including transport costs and increasing returns to scale. A number of useful models, derived from the original C-P model by many scholars after him, are gradually used in many research fields, including taxation, environmental pollution and so on. However, we believe the following aspects deserve further study:firstly, the existing application fields regarding the NEG are basically related to manufacturing, but seldom refer to productive services. Secondly, more and more scholars have noted that the industry and the space in manufacturing industry agglomeration are two-dimensional and producer services industry is the same case. The duality and two-dimensionality are closely linked, which makes it possible to study the internal mechanism of the relationship between producer services agglomeration and manufacturing agglomeration. Thirdly, the dual agglomeration is related to the concept of space, therefore, research on its interaction effects is meaningful, which is still in lack at present; fourthly, we should pay more attention to how we can promote coordinated development of the manufacturing agglomeration and the producer services agglomeration in terms of space on basis of the internal mechanism of producer services agglomeration. These four cohesive issues consist the focus of this paper.In theoretical research, replacing transport cost with information technology in perspective of New Economic Geography, this paper presents a theoretical framework to analyze the producer services agglomeration, based on which it further discusses the relationship between producer services agglomeration and manufacturing agglomeration and the interaction between producer services agglomeration and different types of manufacturing agglomeration. At the same time, based on this relationship, this paper studies complementary effect and crowding-out effect generated by the dual agglomeration interaction. Finally, back from theory to reality, it puts forward the path to realize the coordinated development of secondary and tertiary industry. In the empirical research, according to Gini coefficient, LQ and K-spec, this paper studies the characteristics of Chinese producer services agglomeration in two-dimension of industry and space perspective, based on which this paper uses econometric model to analyze major factors affecting the producer services agglomeration by using data from 222 prefecture-level cities. In the meanwhile, the spatial heterogeneity between eastern region and central and western region is considered.Due to lack of index to measure the complementary effect and crowding-out effect, this paper designs an indicator named coordinate degree to compromise these two effects and proposes four hypotheses in two dimensions of industry chain and space, verified from a cross-regional perspective.Through theoretical analysis and empirical research, this paper has the following conclusions:(1) Under the analytical framework of New Economic Geography, this paper replaces transportation costs with information technology, and builds analytical framework of "Factor-Urban-Space-Institution". The research shows that knowledge-intensity, level of information technology, city and government size affect producer service industry agglomeration, further more, producer service industry agglomeration is seldom affected by geographic factor and cycle accumulation cause in contrast with manufacturing industry. Besides, the non-linear relationship between service industry agglomeration and city size shows that, the agglomerating path between eastern China and western China are completely different which make service industry agglomeration exist in eastern China in long-term, while it presents decreasing affection when city size reaches an entropy number on the contrary.(2) Different interaction strength arises between manufacturing and producer services agglomeration. We believe that there are two mutually reinforcing forces composing the internal mechanism of interaction between producer service and manufacturing agglomeration. The first one is that producer services not only promotes manufacturing as an intermediate inputs, but also it has different effect on manufacturing sub-sector, thus the network relationship is formed. The other one is that manufacturing sector has reverse effect on producer services from both static and dynamic aspects. The former is mainly reflected by the existing manufacturing agglomeration's demand for producer services, while the latter is mainly reflected by the impact of manufacturing industry chain's dynamic evolution on producer services. The paper's empirical research shows that interaction strength between labor-intensive manufacturing agglomeration and producer services agglomeration is not strong compared with interaction strength between technology-intensive manufacturing agglomeration and producer services agglomeration.(3)The interaction of dual agglomeration produces complementary effect and crowding-out effect. The difference of interaction between producer services and manufacturing sub-sector agglomeration leads to complementary effect and crowding-out effect between them. In this paper, we explain it in perspective of space and industry chain. The former is studied in physical space and the intangible space, while the latter focuses on radiation effect by regional central cities in the perspective of cross-region. Econometric model shows that there is an equilibrium level of land rent value that makes the coordination degree of dual effect reach the maximum, and the impact of capital on other cities is significant.(4)Coordinated development of secondary and tertiary industries can be achieved by "services agglomeration-spatial structure adjustment".This paper attempts to find a path to achieve the balance between producer services and manufacturing agglomeration by studying service agglomeration especially producer services agglomeration. It is achievable if we examine it from the perspective of spatial organization, breaking through the static conception of space, and expand the closed and isolated concept of region and city to a metropolitan area. Spatial structure adjustment and promoting dual agglomeration which means that services gather in central region within metropolitan area and manufacturing industries concentrated in the external area, thus forming urban functions division of "service-production" in metropolitan area, is helpful to coordinate development of secondary and tertiary industries, avoiding resources crowding out effect phenomenon in a single area.The conclusions above broaden NEG's applying fields and the relationship between service and manufacturing industries. Especially transferring process from space property to industrial property is cleared, avoiding placing too much emphasis on industry while ignoring space factors in previous research. In general, this paper has made following progress compared with previous studies:(1) we have made appropriate amendments on New Economic Geography theory, and use it to analyze producer services agglomeration, making up the shortfall that previous studies focus too much on manufacturing agglomeration; (2) defining the internal mechanism of interaction between producer services and manufacturing agglomeration, especially analyzing it in the perspective of industry chain, avoiding the shortcomings of the overall analysis not deep enough; (3)The study of dual agglomeration has a comprehensive consideration of the individual industrial clustering effect and providing an idea to study co-agglomeration, making it more meaningful.Due to author's own academic skills limit, there is still much deficiency in this paper that is summed up in the conclusions, which is also the direction of future efforts.