Spatial Agglomeration, Economic Growth And Welfare: Theory And Evidence

Simon Kuznets，who is the Nobel Prize winner in Economics，has pointed out that thespatial agglomeration of economic activity accompanied by modern economic growth isthe most significant features．Nowadays，as the extensive development of the informationtechnology revolution and globalization，the phenomenons of spatial agglomeration andeconomic growth have been becoming increasingly prominent．From the world-wideperspective，the most important manifestation of spatial agglomeration is urbanization，as Mumford，an American urban history experts，has pointed out： The whole world hasbecom a single city in many ways．On the other hand，the rapid global economic growthis accompanying with the above phenomenon．Now let us focus on China，since itseconomic reform from1978，China has got a remarkable economic miracle，with theaverage annual growth rate of9.8%，which has attracted world-wide attention．In themeanwhile，the spatial distribution of economic activity has also undergone a significantchange，a core-peripheral structure in China is becoming more and more obvious．The twostylized facts of the real world prompt us to think about the following questions：（1）whatis the internal mechanism of the spatial agglomeration？That is to say，which factorsdetermine spatial agglomeration？（2）what is the relationship between the spatialagglomeration and economic growth？（3）how does the spatial distribution of economicactivity affect the welfare of the residents？This dissertation aims to answer the above questions．We firstly sort out the existingliterature in the field of the new economic geography，and give brief comments．Thenbased on the existing theoretic framework，we explore an empirical study of thedeterminants of the agglomeration of China s manufacturing industries，which providesempirical evidence from China for new economic geography． Thirdly， based onendogenous growth theory and new economic geography， we develop a two-regions-three-sectors general equilibrium model，which aims to analyze the influencesof the knowledge spillovers and spatial agglomeration on long-run growth．Then werespectively explore empirical studies from trans-regional level，trans-industrial level anddynamic external perspective to verify the relashionship between spatial agglomerationand economic growth，which thereby furher enrich the contents of field．Finally，weattempt to analyze the effects of spatial distribution of economic activity respectively fromtheoretic and empirical perspective，which identifies important direction for futureresearch in spatial economoics．The main conclusion of this dissertation can be summarized as follows：(1)The empirical study on the formation mechanism of the industrial agglomerationshows that the proxies for natural resource endowment，Marshallian externalities，homemarket effect positively influence the agglomeration of China s manufacturingindustries，while the proxy for local protectionism obstructs industrial agglomeration．(2) The dynamic model of new economic geography shows that while the spatialdistribution of economy is in the case of symmetric balance，the efficiency of theinterregional knowledge spillovers leads to the different long-run growth rate，and theasymmetry of knowledge spillovers also causes different long-run growth rate，whlie thereis no obstacle between the interregional knowledge spillovers，the long-run economicgrowth rate will reach a maximum；while the spatial distribution of economy is in the caseof core-peripheral structure，the long-run growth rate is greater than other situations，thatis to say，the spatial factor has very important impact on economic growth，while is noobstacle between the interregional knowledge spillovers，the spatial factor will have notany impact．(3) Chapter5explores an empirical study of the effects and mechanism of industrialagglomeration on TFP．The resaults show that from the perspective of the whole industry，industrial agglomeration mainly promote TFP through technical efficiency， whilesub-industry shows that the effects of industrial agglomeration on TFP differ among different industries．In addition，from the mechanism of industrial agglomeration，wealso find industrial agglomeration promote technical efficiency mainly through Marshalls external economies．(4) Chapter6conducts an empirical study of the relashionship between spatialagglomeration and economic growth using China s provincial panel data from1991to2010．The results show that spatial agglomeration has significantly positive effects onChina s provincial economic growth，which survive from various robustness checks．Inaddition，the results of sub-regional regression show the role of spatial agglomeration onChina s provincial economic growth depends on the dimension of the geographic location（coastal or inland areas）．(5) Chapter7estimates the effect of dynamic externalities on regional industrialeconomic growth using a large sample of panel data including Chinese28provinces and21industries．From the whole country we find that the effect of specialization anddiversity on industrial economic growth is nonlinear，while local competition don t havesignificantly effect．Further analysis in the robustness check indicates that the effects ofdynamic externalities on industrial economic growth depends on types of industry and thedimension of geographic location．That is to say，the effect of specialization mainly existsin traditional labor-extensive industries，while effect of diversity mainly exists in high-techindustries．(6) This dissertation analyzes theoretically and empirically the welfare effects of thespatial distribution of the economic activity，which shows that the spatial agglomerationcan enhance the residents subjective well-bing who live in urban areas，while reduce therural residents subjective well-bing．...