Market Integration,Spatial Interaction,and Regionally Coordinated Development

With the pace of the Overall Development Strategy of Regional Development such as China Western Development and the construction of urban agglomeration,the regional economy in China has developed rapidly,and at the same time there emerges the characteristics of "convergence within the club and divergence between the clubs",which challenges the coordinated development.Since the 18th National Congress of Chinese Communist Party(CPC),the state has clearly put forward the strategic goal of optimizing the economic development space,which aims to promote the regional development policy and promote regional coordination,cooperation and common development by reshaping the economic geography pattern.China’s regional inter-regional prevalence of "beggar-thy-neighbor" market segmentation,is currently an important obstacle to optimize the spatial pattern of economic development.This paper will try to link the characteristics of the regiunai economy "plate",the convergence of the club,the divergence between the club" and the objective reality of the domestic market segmentation,combine them in the same analysis framework through spatial interaction as the link,and then put forward the idea of "to the big space to big pattern" through market integration and spatial interaction.On this basis,this paper would offer some suggestions on regional coordination.Optimizing the economic development space needs to break up the regional blockade and the interests of barriers,and comprehensively improve the efficiency of resource allocation.However,it has been shown that market segmentation is a rational choice and balanced result of government competition,and China is,to a certain extent,plunged into the "prisoner’s dilemma" of interregional market segmentation.In this paper,we use the semi-parametric spatial hysteresis model,the semi-parametric spatial panel VAR model and the inter-provincial panel data to examine the existence of the segmentation strategy interaction and the tax incentives behind it.The results show that there are significant strategic interactions in the market segmentation of each region.The tax burden has a nonlinear effect on the regional market segmentation.The appropriate tax burden can help to weaken the distortions of the taxation competition on the market segmentation.The indirect tax-based tax system strengthens the motivations of interregional market segmentation.The semi-parametric spatial panel VAR model further examines the dynamic response of the fiscal and taxation structures to the market segmentation between the region and the neighboring regions,confirming the impact of the fiscal and taxation structure on the interregional strategy interaction.The structural tax cuts,indirect tax adjustment and other fiscal and taxation reform,would help to improve the local interest distribution mechanism,and thus promote the integration of the domestic market.China’s regional difference in foreign trade is one of the incentives contributing to the regional economic convergence and divergence,and the domestic market segmentation played a "fuel" role.This paper sets up a exporting model based on the new-new trade theory,uses the panel data for nationwide manufacturing enterprise to estimate the exporting probability model and quantile model for intensity,and examines the synergistic mechanism by which domestic market segmentation and enterprise productivity influence exporting.Econometric results show that productivity is the internal factor of exporting decision and intensity when market potential and market segmentation are controlled;market potential comes up with home market effects.Besides,market segmentation produces distorted incentives on exporting,and reduces the atbility of domestie scale eeonomy to bring up exporting and the endogenous motivation to promote exporting through the enterprise’s own productivity.Panel quantile estimation confirms the difference of dependence between enterprises with different intensity.The segmentation of the domestic market has raised the regional trade imbalance by enhancing the export tendency of enterprises in the eastern region and increasing the number of export enterprises.Regional economic convergence and divergence exist side by side,and the characteristics coexist not only between the four regional plates,but also widely exist in the same province between the core area and the border zones.The county units lying along the boundaries are in a certain condition of "cracks" and often become the"victim" of zero sum game between the provinces.This paper investigates the "shear"effect of the provincial boundary and the catalytic effect of the market segmentation on the basis of estimating and controlling the county capital stock.Market segmentation strengthens the "shear" and "shield" effects of the border,and the border areas have suffered more loss due to the segmentation of inter-provincial markets.To help the provincial border to get out of poverty,it is needed to further promote the integration of the domestic market,and gradually break or weaken the inter-provincial blockade.It is essential to fade the external status and foil role through the economic cooperation with neighboring provinces and regions,and turn the boundaries to bridges and links in space interaction and economic penetrations.Regional "club cooperation" strengthens the economic space segmentation trend,and becomes the direct cause of regional economy "plate" and the coexistence of convergence and divergence.This paper examines the inter-regional "club cooperation" and the coexistence of regional convergence and divergence it raised.Based on the overlapping demand theory and the gradient cooperative game model,this paper describes the economic mechanism of the cooperation of the club,and uses the bilateral railway freight data and nonparametric fitting to verify the province gradient gradual cooperative law.Interregional trade cooperation and the realization of excess returns depend on the enough close of economic gradient.The economic gradient led to inter-provincial trade "club cooperation".The partial derivative generated by local polynomial estimation of semi-parametric spatial model shows that the marginal effect of economic gradient on inter-provincial trade cooperation is dynamic.The traditional four regional development strategies may enhance the "club convergence through the club cooperation mechanism.The regional development strategy in the future would lie in the combination of plate strategy and shafts or belts,and the counterpart cooperation and market integration among regions.Spatial pattern optimization and economic geography of remodeling should never ignore the spontaneous migration of labor and its market-driven force.Based on the theory of forward and backward-linkages of New Economic Geography,this paper constructs an analytical framework of market access-consumer utility-migration decision,specifies an individual migration decision model.Using the census data,we estimate a nonlinear regression model to test the effect of market access on migration flows.The study shows that the market access affects consumer utility through product varieties and attracts migrants to the developed regions;the market driven migration not only enhances individual utility,but also facilitates spatial equilibrium of factor allocation;agglomeration of population has a positive impact on the productivity of receiving areas.The research findings provide references for policy initiatives of organized migration,balanced allocation of population relative to other factors,and coordinated regional development.The integration of the domestic commodity market will ensure the healthy operation of the "market potential-the diversity of manufactured goods-consumer utility-rational migration”mechanism,and realize the coordinated distribution of population and economy;the integration of labor market will further break the system of population migration obstacles,and help to achieve regional balance in the sense of percapita.