The Effects Of Factors Agglomeration And Public Expenditure On Urban Economic Efficiency

The spatial agglomeration of economic activities is one of the significant facts associated with the modern economy,and the most important manifestation of spatial agglomeration is urbanization.Urbanization is the agglomeration process of production factors,which is characterized by the comprehensive gathering of technology,funds and talents to the city.The progress of urbanization in China has been promoted rapidly,since the reform and opening up,and the role of driving regional growth is becoming more and more prominent.City provides not only employment opportunities for the surplus labor force transferred from rural areas,but also sufficient market,complete infrastructure and environment for regional development.However,China's urbanization is relyed on the inputs expansion mainly,which has brought lots of problems already.The level of urban agglomeration in China is generally low,still lagging behind the development of economy and industry,and the urban scale is also significantly lower than that of the developed countries.Under the situation of structural transformation,urban development is facing the challenge of changing growth mode and improving urban efficiency.China has an enormous population and a vast territory.The efficiency growth of city not only rely on the agglomeration effects of production factors,but also the strong support of public expenditure.The academic study of agglomeration is mainly focused on the industrial agglomeration dimension,while pay little attention to the production factors agglomeration.On the other hand,there are few literatures on the effects of factor agglomeration to the urban efficiency.This paper focuses on enhancing the factor agglomeration effects,optimizing the structure of public expenditure,and promoting the urban efficiency ultimately.The research method of spatial econometrics is used in order to measure the spatial spillover effects of the public expenditure and the agglomeration of production factors better.The main structure of the paper is as follows:The first part is the theoretical basis of the thesis.The concept connotation of production factors agglomeration is defined,and relevant research results are systematically summarized.The paper determines the influence factors to the price of production factors,the flow rule and the power mechanism of agglomeration.Regional differences in factor endowment structure is reflected not only the amount and and species of production factors,also the output efficiency.These are the main reasons of the regional price differences of production factors.The fully flow of production factors is the precondition of agglomeration.The production factors flow and gather in areas is under the intrinsic motivation of pursuit for maximizing reward.The power mechanisms of factors agglomeration is natural,market and institution.The second part is the influence mechanism.Based on the innovation spillover model,the equilibrium national income decision model,game theory and Nash equilibrium method,the paper analyze the influencing mechanism of production factor agglomeration on urban efficiency,and the influence mechanism of public expenditure on factor agglomeration effect and urban efficiency.The spatial agglomeration of production factors can improve the efficiency of factor allocation,and promote the economic growth of the whole area.However,it may also cause the unequal development between the center and periphery region due to the double loss of elements and welfare for the latter.The third is the part of the empirical analysis.Taking the area around Bohai as the research object,the Malmquist index method based on DEA is applied to calculate the efficiency level of each city,and the difference of urban efficiency and its dynamic evolution track are analyzed.Principal component analysis is applied to calculate the agglomeration index of production factors in Bohai,and depict the dynamic development process and spatial distribution of production factors in different cities.The efficiency varies greatly among different cities,but the phenomenon of "spatial convergence club" generally appears.On the other hand,the agglomeration level of the productive factors between the cities around Bohai is quite different.The spatial distribution is very uneven,and the factors concentration trend to a few large cities is increasingly obvious.The Moran'I test has proved the spatial correlation about the agglomeration of production factors and the public expenditure,using spatial Durbin model,this paper measure the agglomeration effect on urban efficiency and the spillover influence to the adjacent city.There is a difference agglomeration influence of production factors on city efficiency.The paper also calculate the public expenditure function on the agglomeration effect and urban efficiency.The fourth is the conclusion and the countermeasure part.The main conclusions are:(1)The agglomeration mechanism of production factors and the heterogeneity agglomeration effectThis paper focuses on the agglomeration effect of the following four factors: common labor,human capital,financial capital,science and technology.The result proves that the agglomeration of production factors can effect on the urban efficiency,and the effects between different factors is heterogeneity.The dividend of capital intensive development is receding,while the demographic and technology dividend are still expected to provide sustained impetus for urban growth.This study proves the necessity of the transformation of economic structure from empirical perspective,also points out the direction of the transformation.(2)The influence mechanism of urban efficiency and the "time and space inertia"The research shows that urban efficiency has path dependence in two dimensions: time and space.The urban efficiency can be effected by both itself and its surrounding cities,and the former is main.The efficiency spillover between cities is more negative.The polarization effect is still the main force that influences the development of Bohai region.(3)The different effects of public expenditurePublic expenditure has a weakening effect on local efficiency,while a positive spillover effect among regions.Therefore,there should be more focus on the interests of the whole region for the public expenditure,breaking away from the localism.The influence of public expenditure on the agglomeration effect between various production factors is not same.The increase of public expenditure can promote the agglomeration effect of the following three factors,such as common labor,human capital and technological elements,but it is not conducive to improving the agglomeration effect of regional capital.Based on the above conclusion,this paper put forward the following suggestions: optimize the urban agglomeration environment and improve the knowledge-based factors such as human capital and technological;promote regional specialization of labor division and industrial cooperation based on endowment advantage;break market segmentation,promote the spatial pattern of metropolitan as the main form of harmonious development;strengthen the mechanism of top-level design,cultivate the institutional environment for promoting the effective devlopment of the centre and periphery both.