Economic Geography And Regional Economic Growth

Promoting economic growth and regional coordinated development has always been an important issue in China.Since reform and opening up,China has achieved miraculous high-speed growth,while at the same time,there are substantial regional disparities within China,for instance,disparities between the eastern,central and western regions,between rich and poor areas,and between urban and rural areas.The uneven economic development brought by the gap between different regions is not conducive to steady development of China's economy under the New Normal,and will seriously affect the coordinated development of society and economy.Therefore,it is of great practical significance to do research on regional economic growth and to give suggestions that we can take to promote regional coordinated developmen.The New Economic Geography,emerged in the 1990 s,brought new perspective to the study of economic growth.Mainstream economics research hadn't included spatial dimension into analytical framework for a long time.But the fact is that the economic activities are unevenly distributed through out the world,agglomeration,is what we have seen in every country.The lumping distribution of economic activities is very obvious and complicated.Despite the First Nature difference in climate,resource and land fertility leads to uneven distribution of population and economic activities,but it's not enough to explain the phenomenon of agglomeration.Agglomeration to a certain extent will lead to differentiation in regional development,and further expand regional disparity.The formation of different regions at different levels of development has been affected by cumulative causation effect.As a result,the mainstream economics is faced with unsatisfaction with respect to interpretating economic development in real world.Main reasons for this problem are the complete competition in the market and the ignorance of scale economy.The emergence of the New Economic Geography not only brought spatial dimension into economic research,but also gave up the traditional assumptions of complete competition in the market and constant returns to scale.The New Economic Geography assumes increasing returns to scale,the existence of transportation costs and incomplete competition in the market.In addition,the New Economic Geography brought all these three assumptions into the general equilibrium analysis.The rise of the New Economic Geography shed a light on explaining the phenomenon of agglomeration and gave insightful explanations on the real world development,as well as gave new directions to solve practical economic issues.With the development of spatial econometrics,it is not only possible to add spatial dimension to the economic analysis,but also this becomes an important research field that can not be ignored.Studies on spatial econometrics also gave us interesting revelations.As long as spatial dimension is included in the analysis of regional economic growth,a common finding is that there is a strong spatial correlation in economic growth between adjacent regions.The more developed provinces are relatively concentrated in more developed areas,showing a high-high cluster.The less developed provinces are relatively concentrated in the underdeveloped areas,showing a low-low cluster.This phenomenon is related to the New Economic Geography's finding of cumulative causation effect.The spatial correlation is reflected in the spatial spillover effect of regional economic growth.For the more developed regions,there are positive externalities for their lagged neighbors.And for less developed regions,there are negative externalities for their leading neighbors.Faced with findings from the NEG and spatial econometrics,two questions have been raised by this study.First,can we utilize the findings from the New Economic Geography to promote further development of leading regions,as well as facilitate the development of the lagging regions? Second,are there any viable methods to make use of the spatial spilover effects of regional economic growth to coordinate development between leading and lagging regions? These two questions are the starting point of writing this paper.Based on theory from New Economic Geography,Regional Economics and Regional Coordinated Development,this paper uses the technical methods including spatial econometrics and try to solve the above two questions above through theoretical exploration and empirical research.Following this idea,this study contains the following eight chapters.The first chapter introduces the starting point and significance of this study.The second chapter is literature review.The third chapter reviews theory from New Economic Geography,spatial spillovers of regional economic growth and regional coordinated development.The fourth chapter chooses the appropriate economic geography indicators to visualize the three theoretical elements from the New Economic Geography--increasing returns to scale,transportation costs and factor mobility.Density is used to measure the degree of spatial agglomeration,which indicates increasing returns to scale.Distance is used to describe transportation costs.And Division is used to degfine factor mobility.And from this point of view chapter four studies China's economic geography,and analyzes China's regional economic problems.Chapter five analyzes the intrinsic dynamics of regional economic growth using panel data,which includes the new economic geography factors and other factors into the model to answer the first question raised by this paper,which is how to utilize the findings from the New Economic Geography to promote further development of leading regions,as well as facilitate the development of the lagging regions.The empirical study of this chapter gives the answer to the first question: higher density,shorter distance,lower division help achieve better and faster development,that is to say,increasing density,shortening distance and reducing segmentation are the New Economic Geography ways to promote the regional economic growth.In the sixth chapter,it is proved that there is a strong spatial correlation in regional economic growth and this chapter shows the direction and size of the spatial spillover effect.On the basis of the empirical analysis in the fifth chapter and sixth chapter,the seventh chapter gives answer to the second question of how to take advantage of the spatial spillover effect to achieve coordinated development between regions using the case study from Beijing-Tianjin-Hebei.The answer to the second question is,to achieve common development in adjacent regions,central government should play a role in boosting cooperating infrastructure construction between adjacent areas.The conclusion of this paper can be summarized as follows,through the study of the New Economic Geography,this paper studies the impact of economic geography on China's provincial economic growth.It is found that the increasing density,shortening distance and reducing division will promote the development of regional economy.In the spatial panel model built by this paper,it is found that regional economic growth has strong spatial spillover effect,which means that there is a serious interaction in economic growth between neighbor provinces.In general,to a specific region,economic growth is achieved by both engines from itself and the spillovers from its neighbors.For itself,growth is affected by some economic geography factors,such as economic agglomeration,transportation costs and so on.In the fact of diminishing marginal returns,the marginal gains from self-agglomeration,etc.,are reduced when the regions has developed to a certain extent,and on the other hand,growth of this region might be affected by negative spillovers from its less developed neighborhoods.At this point there is one possible option to solve this negative spillover effect,which is to carry out regional coordinated development measures by central governmet to coordinate regional economic development.