Comparative Advantages In Enterprise Clusters In Rural Area Of Central China

Since 1980 there has been a lower speed economic growth in some old industrial districts in the world. At the same time, many enterprise clusters, being the emerged glitters in the global economy, have attracted increasingly related subjects, owing to their rapid economic growth. At present, the study on enterprise clusters in developed countries or developed areas is far more than that in rural areas of central China in terms of the existing literature. This paper will emphatically explore the source of comparative advantages of enterprise clusters in rural areas of central China, based on the research achievement of other scholars. These clusters driven by market force, without any advantageous conditions, form themselves. Meanwhile, this paper attempts to present a new framework, acting enterprises as a basic unit of analysis, cluing the increasing-returns, applying new theoretical tools, such as new economic growth, new economic geography, new classical economics and network organization theories to study enterprise clusters. At last, I will state a case study on steel tape clusters in NanZhuang village, YuCheng county, Henan province.Attributing the increasing-returns to the economies of scale or the economies of the division of labor has been always a debated issue in the field of economic for a long time. This paper suggests that both the economies of scale and the economies of the division of labor are the two sides of the increasing-returns. In rural areas of central China, the higher-speed of the increasing-returns of the region that clusters locate in is just the result of the co-action of these two sides. Concentrating production reduces the transport cost largely and the network linkage between each behavior subjects decreases the transaction costs greatly. This can be consistent with the hypothesis of the transport cost and the transaction cost being an intermediate level requested by the new economic geography theory and the new classical economics theory. Enterprise clusters have the characteristics of the economies of scale and the economies of the division of labor obviously, while the network linkage palliates the dilemmas between the economies of scale and the increasing of the coordination costs resulted from the enlarging of the scale, the economies of the division of labor and the increasing of the transaction costs as a result of the deepening of the division of labor. Therefore, the static comparative advantagesof enterprise clusters are derived from the triple action of the economies of scale, the economies of the division of labor and the network linkage. This paper will definite a "comparative advantages space of clusters". The nearer the point inside that "space" away from the best point is, the better the management of the cluster is and the more potential the development of this cluster is. The dynamic comparative advantages of enterprise clusters are mainly resulted from its easier creation of the new firms, the deepening of division of labor and the universal occurring of the imitative innovation. The steel tape clusters in NanZhuang village, YuCheng county, Henan province has been developing powerfully and emerging slightly on the Yudong plain, as a result of the comparative advantages stated above, in the absence of a high-tech innovation network, solid basis of industrial development, the entrance of the large multinational or trans-regional corporations and the technique introduce coming from the government. But now, it exposures many problems about its management, which ought to be taken account into by some related administration.