| Spatial concentration and growth are the two features of economy, which are usually closely connected with each other. However, current studies have not yet reached a consensus on the relationship between them. In addition, the new evidence of their relationship, namely the non-linear relation, is also not explained with satisfactory. In China, it is now at a crucial phase of reshaping its economic geography. The question of how to guide and plan its regional economic geography influences not only the coordination of regional development, but also the sustainable growth of Chinese economy. However, few studies have touched upon the problem. Faced with the current situation, the present paper firstly established a dynamic framework on the basis of new economic geography, then tried to explain why the influence of spatial concentration on economic grow changes in economic development within the framework, then discussed the balancing problem of dynamic efficiency and spatial equality in China, and finally tested the proposed hypothesis by data of cities in China.The paper first analyzed the experience of economic agglomeration in China by "phenomenon-influence-policy effect", and compared it with international experience. It is found that there were some shared opinions of the relationship between spatial concentration and regional disparity:it is gradually acknowledged that spatial concentration is quite common; though in the short-term transferred payment could relieve regional disparity, in the long-term, it is crucial to promote the integration of product and factor markets by eliminating the policy barriers of the interregional exchange of products and factors. Besides, since many different opinions of the relationship between spatial concentration and economic growth still exist, the paper also discussed the relation between the two.For conflict between spatial agglomeration and economic growth, this paper develops a two-region dynamic model with regional barrier from three sources to explain the above differences. The study found that degree of regional integration has an important influence on relationship between industrial agglomeration and economic growth:When knowledge spillover or lower capital mobility is at a low level, industry agglomeration promotes economic growth; when knowledge spillover and capital flow are relatively higher, industrial agglomeration hinders economic growth. Further, given the degree of industrial agglomeration is also endogenously determined by regional integration, this paper analyzes the impact of varied regional integrations on economic systems. In addition, as an application of theoretical models, we use the model in this paper analyzing the balancing efforts between spatial equality and dynamic efficiency currently faced by China. The study found that knowledge spillovers are weak, the less developed areas benefit from agglomeration if industrial agglomeration strongly promotes the economic growth; otherwise welfare of the less developed areas decrease if industrial growth is excessively concentrated with considerable negative effects.On the basis of two-region model, we further establish two-country three-region dynamic model, which characterizes coexists of internationalization and open-up of China’s regional economy. The study found that open-up has always been in favor of promoting industrial agglomeration while encouraging growth. The impact of open-up on industrial distribution and economic growth depends on size of home country, open-up level and degree of internationalization. With influences on social welfare, open-up of a country enhances the welfare of all residents, reduces regional disparities. In addition, if the policy of open-up is strong enough, foreign residents also benefit from it. Opening in early stages of internationalization helps improve welfare in a country, but achieves negative effects on welfare when a higher level of internationalization and a lower level of open-up is coexisting.Finally, the paper introduces an empirical model examining relationship between special agglomeration and economic growth based on census of286cities from2003-2911. The study suggests that spatial concentration of Chinese urban economy has a nonlinear effect:with45,700RMB per capita GDP as a critical point, special agglomeration promotes growth when per capita GDP is lower than the point; however agglomeration discourages growth when per capita GDP is higher than the point. The paper further examined nonlinear effects of spatial agglomeration mechanism and found that improvement of transportation infrastructure, mobile phones and proportion of researchers in total population enhances the level of inter-regional knowledge spillovers, and thus weakens the role of agglomeration in promote growth. |
