Study On Industrial Agglomeration And Urban Size Evolution

Industrial and urban development are two main aspects of regional economy.Industrial agglomeration and urban size evolution are two issues of great importance throughout worldwide industrialization and urbanization,featuring both structural and spatial characteristics.Industrialization can be represented by the agglomeration of non-agricultural sectors in specific regions,which brings out a major labor transfer from primary industry to secondary and tertiary industry,as well as the population movement from rural area to urban area.Furthermore,industrial division and spatial layout forms urban agglomeration economies,promoting the constant evolution of urban size.Hence,industrialization is the original driving force of urbanization,and industrial agglomeration is the intrinsic motivation of urban size evolution.The reason that industrial agglomeration and urban size are associated strongly,lies in their high interconnection in spatial dimension.The space carrying industrial agglomeration is in fact the physical existence of urban area.Thus,the scale and layout of industrial agglomeration determines the size,form and spatial system of urban area.Industrial agglomeration turns into dispersion when scale economy reaches the limit,then the spatial structure of urban size changes accordingly.The objective existence of spatial heterogeneity further divides such process.The spatial layout of industries displays differentiated patterns due to diversified economic elements,including natural resources,labor,capital,technology and information,rendering different developing features and mechanism in worldwide urban size evolution.Although patterns are different,all urban areas face some universal issues: what brings out agglomeration economies and furthermore,agglomeration diseconomies,whether there exists an optimal urban size that fits the current urban development.These issues are exactly what the essay studies on.Core standpoint of the essay is,industrial agglomeration is the intrinsic motivation of urban size evolution,the influencing mechanism shows differentiated patterns because of spatial heterogeneity,and the fixation of current urban problems in economic reality firmly relies on the adjustment and improvement of industrial agglomeration.Based on the summarization of related researches and practical development,the essay demonstrates the core standpoint through three steps.First,industrial agglomeration exerts crucial influences on urban size evolution through some common factors and their mutual effects,including spatial,industrial,institutional and environmental factors.Those influences,more often seen as externalities,are comprised of both positive and negative ones.Positive externalities are spillover effects of industrial agglomeration,bringing out urban agglomeration economies and promoting the evolution of urban size.Negative externalities are crowded effects that impose urban agglomeration diseconomies and propel industrial disperse,leading to changes of internal urban spatial structures.The critical point of agglomeration economies and agglomeration diseconomies can be considered as optimal urban size.Under theoretical assumptions of neoclassical economics,optimal urban size is decided by general equilibrium of cost and revenue,which uses static methods to measure dynamic urban changes,making it inapplicable in practice.While with theoretical assumptions of New Economic Geography,optimal urban size derives from a two-region,two-sector model,majorly considers spillover effects more over crowded effects,still not compatible with the reality.Second,with refined spatial heterogeneity,industrial agglomeration intrinsically influences urban size evolution through a multi-level,nested mechanism.A two-level Hierarchical Linear Model is established to examine such mechanism with panel data collected on prefecture-level cities in China.The mechanism can be divided into cities with manufacturing sectors as the leading agglomerate industry,others with producer services sectors as the dominant one.Common factors that play significant role in industrial agglomeration are empirically defined as technology index,marketization index,transportation index,natural resources index,institution index and environment index.The HLM results show,cities majoring in manufacturing industries develop mainly from specialized agglomeration,while cities dominated by producer services industries develop from both specialized agglomeration and diversified agglomeration.Combining empirical results with typical case studies,we can recognize that at present stage,technology,marketization,institution and environment index play the role of spillover effects,transportation index serves as an obvious crowded effect,and natural resources index acts accordingly in different situations.Finally,under theoretical assumptions of New Economic Geography,the essay comprehensively considers the influencing mechanism of both spillover effects and crowded effects,and builds up a mathematical model that determines urban benefits per capita,which indirectly calculates out optimal urban size for individual prefecturelevel cities.The optimal urban size in context,is essentially a reasonable size of urban employment in secondary and tertiary industries,which can be deemed as a reflection of urban economic size.Considering spatial heterogeneity,there are obvious differences among industrial agglomeration of individual cities or urban areas.Thus,there isn't any universal optimal size for all cities.Comparing calculation results with actual urban sizes,we can find that except Beijing,Shanghai and Shenzhen,actual sizes of other cities are smaller than optimal urban sizes,meaning the majority of Chinese cities develop inadequately in industrial agglomeration and scale economies.Such problem is resulted from both intrinsic and extrinsic reasons,which requires corresponding improvements from industrial agglomeration.Above all,urban size evolution in China is fundamentally motivated by industrial agglomeration,under the influence of spatial heterogeneity develops into different paths.Hence,in order to fix prevailing problems such as most urban actual sizes are smaller than optimal ones,and scale economies effects are still insufficient,we must turn to the foundation of industrial agglomeration to seek practical solutions,enhancing positive spillover effects,reducing negative crowded effects.At the changing time of new technological and industrial revolution,innovated resources such as technology,knowledge,information and talents are of greater importance in industrial agglomeration and urban economies.Spillover effects oriented by technological innovation,are prime driving forces for urban size evolution.Meanwhile,it is necessary to notice the leading role of market in resource allocation,which makes it reasonable for superior resources to agglomerate towards big cities.Thus,we should encourage superior resources to continuously gather in and around big cities so that maximized benefits can be yielded.As for megacities Beijing,Shanghai and Shenzhen,it is instead essential to direct incompatible industries to disperse or be transferred to surrounding areas,in order to establish urban agglomerations that enable resources to interflow,industries to complement,and economies to develop cooperatively.