Research About The Impact Of Industrial Agglomeration On Firm Survival In Manufacturing

The problem of enterprise's survival is an important part for the study of economic management; long-term survival is the foundation of all enterprises to continue. The goal of enterprise management is survival, profit, and development, while the profit and development are basic conditions for enterprise survival. Under the background of global economic integration accelerating, such as the technology upgrading, changeful market environment, fierce competition, the enterprise is facing more pressure to survive, how to improve the ability of enterprise survival has become an urgent issue.Industrial agglomeration can effectively improve the survival ability of enterprises by collaboration the enterprise of upstream and downstream, the optimization of labor resources, the spread of knowledge and technology to produce positive externality. Herein, by employ the heterogeneous enterprise as breakthrough point, we investigated the critical productivity, equilibrium conditions, and established the theoretical model of industrial agglomeration effect on enterprise survival using the business productivity as a transmission mechanism. According to the new economic geography theory, the advantage of heterogeneous enterprise productivity can be attributing to accumulative effect. However, the self-selection effect was often ignored suggested by new economic geography theory, and overestimate the influence of the accumulative effect. To further investigate the accumulative externalities, we utilize labor endowment to measure the area accumulative effect and the Combes theory was embed in the new economic geography theory. Thus a positive relationship was obtained between industrial agglomerations with enterprise productivity. The existence of the positive externality made the production cost of enterprises was decreased, which reduces the risk of the collapse. In open economy, the enterprise through participating in the international market to contact advanced production technology and management methods, etc., it may directly or indirectly aggravated the "spillover effect" of the enterprise, reduce the critical production cost, so as to improve the survival ability and to promote its sustainable development.As for empirical test, we employed the Ellison-Glaeser index which has to rule out large enterprise scale effect to measure the degree of industrial agglomeration. Meanwhile, accumulative externalities subdivide the specialization economy of externality within the same industry and the urbanization economic of externality between different industries. Firstly, the micro data of Chinese industrial enterprises was processed. Secondly, on the basis of industrial agglomeration level based on four digits and county area measure, variety of micro measurement methods, such as survival analysis model and propensity score matching model, we estimate the industrial agglomeration effects on Chinese manufacturing enterprise survival. The results showed that the relationship between agglomeration economy and enterprise survival probability is the inverted U-shape. This is can be attributing to the tangible element of labor and capital, and intangible elements assemble and flow, knowledge, information and management experience as an examples. In addition, the city scale and specialized-economy have significant positive effect on firm survival. However, as for Jacobs'externality, there is little effect on Chinese manufacturing industry enterprise survival. It can be found that the large market scale reduces the critical productivity level of the enterprise, which leads to the fierce competition, so increasing the risk of business. Under the open economy, export trade can effectively promote industrial agglomeration which plays a positive role to the enterprise productivity and agglomeration economy has greater influence on export enterprise survival time than export enterprises. But, the interactions between specialization, diversification, and urban scale effect and export trade have weakened the effect on total factor productivity.