The Research On Market Integration, Industrial Agglomeration And Overall Development

Since the reform and opening policy, China's market economy has been consistently improved, the phenomenon of industrial agglomeration which is prompted by the market allocation has become increasingly obvious. However, segmentation and blockade in domestic market still exists objectively, which has seriously restricted the specialized division and industrial agglomeration. Currently, under the influence of international economic crisis, the domestic market and industrial development are facing with unprecedented reversed pressure and transformation opportunity. This paper constructs indices for market integration and industrial agglomeration in an innovative way, adopts spatial mathematical model, econometrical analytical method and technique of division and layout, and studies on this important transition issue from four aspects systematically. Is there an inherent law of development in the market integration and industrial agglomeration? Does developing practice of China's market integration and industrial agglomeration have a significant characteristic and accord with this law? Is there an significant internal relationship between both sides and how does the effectiveness? How to promote the comprehensive development and overall coordination of China's market integration and industrial agglomeration in line with the economic law?Firstly, using advanced theoretical model of spatial economic ideology, this paper constructs a normative analysis framework of market integration and industrial agglomeration. The result indicates that, there is an endogenous mechanism between both sides, whereas hinders social equity. Specifically, an asymmetric structure of industrial agglomeration can form endogenously along with the promotion of market integration, which has a strong stability and can promote economic growth, however, a persistent regional disparity also comes into being. The improvement of technical efficiency and prudent policy of local differentiation can possibly promote dispersion of industrial agglomeration and industrial development in backward regions.Secondly, adopting neural network and spatial analysis methodology, this paper constructs comprehensive indices for market integration and industrial agglomeration and analyzes their spatial characteristics. The result indicates that, a significant growth tendency appears in China's market integration and industrial agglomeration during 1992-2007. However, the asymmetric structural feature is becoming increasingly obvious due to continuous expansion of regional disparity and spatial concentration. Specifically, the overall development level of market integration and industrial agglomeration in Eastern China has kept the leading position and rapid growth generally, it's relatively low in both Central and Western China, however, a significant catch-up tendency has appeared in some provinces in Western China.Thirdly, using impulse response and variance analysis, productivity analysis, panel and spatial econometric analysis, this paper has measured the production efficiency of industrial agglomeration and examined internal relationship between market integration and industrial agglomeration. The result indicates that, significant features of China's industrial agglomeration are the relative backwardness in production efficiency and the absolute growth in total factor productivity. Moreover, there are significant positive econometric impacts of market integration and scale, benefit and environment on the overall development of industrial agglomeration. Specifically, the overall efficiency of industrial agglomeration is relatively high in Eastern China, however, it is relatively low and presents a significant internal difference in Western China. Moreover, the most significant effect is caused by interaction between market integration and benefit, scale and environment in Eastern China, Central China and Western China respectively. Meanwhile, it needs to be warned and adjusted that there is a significant negative effect of interaction between market integration and industrial scale in Western China.Finally, adopting method of regional division and industrial distribution, and combining with specific conclusions of endogenous mechanism, tendency analysis and econometric test concerning market integration and industrial agglomeration, this paper defines the overall objective of comprehensive development and regional coordination clearly, reveals two kinds of mechanism on comprehensive arrangement and efficiency coordination, points out three ways of interaction between market integration and scale, benefit and environment, diagnoses four major problems on overall regional division and provides specific pertinent suggestions. This paper suggests that, fully understanding and taking initiative to utilize the two kinds of mechanism and three ways, grasping the polarization tendency of the asymmetric structure of industrial agglomeration, emphasizing the possibility of regional coordination caused by technical efficiency improvement, relying on the inherent interaction effect and significant econometric relationship between market integration and industrial agglomeration, meanwhile, accurately diagnosing and effectively solving four kinds of major problems in typical regions. The specific suggestions include:transferring disadvantage industries and enhancing overall efficiency to cope with decay; extending competitive industries and undertaking gradient transfer to realize catch-up; protecting environmental quality and transforming traditional industries to alleviate backwardness; enhancing overall integration and allowing local difference to gradually unify market. To sum up, this paper has deduced the endogenous mechanism of market integration and industrial agglomeration through theoretical model, has excavated the significant improvement tendency of domestic market integration and the polarized growth tendency of asymmetric industrial agglomeration in China through empirical summary, has extracted the internal interaction effect and significant economic relationship between market integration and industrial agglomeration in China through econometric analysis, and has diagnosed unavoidable serious and increasingly obvious problems of regional disparities and efficiency backwardness through regional division. Facing the historical opportunity in transition period, this paper suggests the acceleration in the improvement of domestic market integration, and in the promotion of overall development and efficiency coordination among scale, benefit and environment of industrial agglomeration.