Domestic Market Segmentation And Its Regional Industrial Structure Effect

Domestic market segmentation is an important force influencing the regional industry and economic development pattern.In order to maintain or expand local interests,local governments have distorted and even replaced the resource allocation function of the market.They have seized "system rents" and formed the phenomenon of domestic market segmentation in the process of transition from a planned economy to a market economy.Domestic market segmentation has seriously distorted the signal of commodity prices,curbed the free flow of production factors,and led to unreasonable resource allocation.This will not be conducive to giving full play to the local market effect,economies of scale,and technology spillover effects of regional industrial structure specialization.At the same time,it has limited the opportunities for division of labor and cooperation among the regions,further intensified the repeated construction and convergence of industrial structure,leading to unreasonable industrial layout.Also it has caused the loss of technical efficiency and configuration efficiency and impeded the upgrading of regional industrial structure.So breaking the domestic market segmentation,establishing a unified national market,integrating economic resources within a larger market,and strengthening domestic regional economic cooperation have become major theoretical and practical issues facing the development of China's market economy and regional industrial restructuring.The understanding and thinking of the above issues formed the research motivation of this paper.Therefore,this study and policy recommendations are not only academically self-consistent,but also fully consider the current complex socioeconomic realities.This paper focuses on the research topic of domestic market segmentation hindering the optimization of regional industrial structure.It considers the domestic market segmentation and the status of the regional industrial structure as the logical starting point for the study.Then it considers the causes of the domestic market segmentation and its impact on the regional industrial structure as the key point of the study.At last it takes the policy thinking of establishing a unified national market and realizing the optimization of the regional industrial structure as the research foothold.Specifically,based on the regional industrial structure theory,this dissertation first estimate and analyzes the status quo and characteristics of regional industrial structure specialization,regional industrial structure differentiation,and regional industrial structure upgrade.Second,it systematically analyzes the rules and mechanisms of regional industrial restructuring and discusses theoretically the mechanism of domestic market segmentation influencing the regional industrial structure,and constructs a theoretical model.Thirdly,it used the relative price method to measure domestic market segmentation,analyzed the market segmentation situation in China since 2000,and empirically tested the influences of the natural factors,technical factors and institutional factors on the segmentation of the domestic market.Then,based on the provincial panel data of China from 2000 to 2015,it the empirically examined the impact of the domestic market segmentation on the regional industrial structure.Finally,policy suggestions are proposed to break the domestic market segmentation and promote the adjustment of regional industrial structure.The innovation of this thesis is mainly reflected in:First,establishing a relatively complete theory and method system,using the relative price method to measure the degree and evolution of the domestic market segmentation,which grasps the status quo of China's market segmentation comprehensively and objectively;also systematically analyzing the historical evolution of the market segmentation in our country and the underlying reasons for its formation;on this basis,empirically examining the factors that affect the segmentation of the domestic market,and proposing relevant countermeasures to break the domestic market segmentation and establish a unified national market.This has certain reference value for deepening the understanding of the harmfulness of the domestic market segmentation and building a modern market system.Second,systematically sorting out the theoretical basis for the segmentation of the domestic market and the regional industrial structure,and focusing on the rules and mechanisms of regional industrial restructuring;on this basis,constructing a theoretical analysis framework for the segmentation of the both.Specifically,following the basic theoretical framework of the New Economic Geography(NEG),analyzing the mechanism of the domestic market segmentation on the specialization of the regional industrial structure and the upgrading of the regional industrial structure;by constructing a game model,the domestic market segmentation affected regional industrial structure differences is systematically analyzed,which makes up for the insufficiency of the existing research on the theoretical mechanism to some extent.Third,according to the theory of regional industrial structure,the meaning of the regional industrial structure and its main contents are clarified,and the interdependence between the regional industrial structure specialization,regional industrial structure differentiation and regional industrial structure upgrade is pointed out.The paper systematically analyzes the status quo and characteristics of China's regional industrial structure,and provides support for the in-depth understanding of the existing problems of China's regional industrial structure.The research of this thesis finds that:First,since 2000,the market segmentation index in China has generally declined.The factors at the natural level are not an important reason for the formation of the market segmentation in our country.Institutional factors are the main reason for the market segmentation in our country.Infrastructure construction and central transfer payments are effective means to eliminate the fragmentation of the domestic market and establish a unified national market.Fiscal decentralization,trade liberalization,economic nationalization,local government competition,and government intervention have motivated local governments to take local protectionism and aggravate the domestic market segmentation.Secondly,at the regional level,the evolution of the industrial structure not only follows the general development laws that have evolved from low to high levels,but also the relationship between regional systems and regions has played a role in the evolution of the structure.The evolution of regional industrial structure is happening under the joint action of market mechanisms and planning mechanisms.The domestic market segmentation has limited the expansion of market size,making it difficult for professional production to meet the requirements of economies of scale,hindering geographical division of labor and changing the revenue function of corporate innovation.Third,there is interdependence among the specialization of regional industrial structure,the differentiation of regional industrial structure and the upgrading of regional industrial structure.The industrial structure of each region of China is also in a period of comprehensive transformation.It mainly presents the following characteristics:regional industrial structure presents obvious regional differences and has the structural characteristics of the tertiary industry;the degree of regional industrial structure is gradually improving,but it is still Low-level specialization;the contradiction in regional industrial structure convergence has been somewhat eased,and the differences in the industrial structure levels in various regions have begun to appear gradually;the regional industrial structure tends to be advanced and rationalized,but it has obvious non-equilibrium characteristics.Fourth,using the manufacturing panel data of 30 provinces,cities,and autonomous regions in China from 2000 to 2015,an empirical test was conducted on the impact of the domestic market segmentation on the regional industrial structure.The test results show that the domestic market segmentation has formed a "strip" market pattern,resulting in the domestic market being artificially small,the commodities and elements being difficult to flow freely between regions,the economies of scale cannot be achieved,and the formation of domestic competition mechanisms has been hindered which is not conducive to the cross-jurisdiction of manufacturers and the improvement of the the specialization of the regional industrial structure.The domestic market segmentation has made it difficult for the regions to carry out various forms of horizontal economic cooperation and thus formed a pattern of regional division of labor,which is not conducive to the regional industrial structure differentiation.It also has hindered the free circulation of production factors and commodities,distorted the allocation of resources,has not been conducive to the exertion of comparative advantages between regions,and hindered the development of the regional industrial structure toward higher levels of precision and rationalization.The regional industrial structure has always been a long-term and urgent problem to be solved in the regional economic development.To adjust the productivity distribution strategy,it is necessary to give full play to the comparative advantages of the region,promote the formation of specialized industrial districts with regional characteristics and increase the degree of regional production specialization,strengthen the reasonable division of labor and collaboration among regions,and continuously promote the optimization of regional industrial structure upgrade.It is noticed that the adjustment of regional industrial structure is carried out under the combined effect of market mechanism and planning mechanism.Historical experience also shows that the function of the market mechanism depends on the integration and unity of the market,rather than the market's dispersion and isolation.Dealing with the relationship between the government and the market and resolving the contradiction between the administrative system and the big market institutionally requires the establishment of an effective coordination and check-and-balance mechanism,seeking the combination of the government and the market,and continuously weakening the institutional arrangements that affect the division of the domestic market.At the same time,the establishment of an institutionalized regional cooperation mechanism will promote the formation of a unified national market,consolidate and strengthen the trade links,economic exchanges and cooperation between the region and the external regions.