Cities' Agglomeration Economies And The Spillover Effect Of Zhongyuan City Group

Since reform and opening up, the economy in Henan province has developed dramaticlly, but at the same time the economic gap between Henan province and China's eastern region is increasingly expanding. In order to promote economic development of Henan province and narrow its gap with other regions,Henan provincial government has proposed the'Zhongyuan city group'growth pole strategy to direct the development of the province's hinterland. However, the current Zhongyuan city group has taken advantage of favorable policies to develop its own economy, but for its hinterland, is this promotion or inhibition? Should there be other co-ordinate measures to make it possible for Henan province to encourage the efficiency improvement?The study is based on agglomeration economies and spread-backwash theory of growth pole and uses space econometric approach to analyse the causality of non-agricultural industrial agglomeration and economic growth in 126 cities and counties in Henan province and the role of growth pole of Zhongyuan city group. Firstly, based on agglomeration economies and its Micro-mechanism and by elaborating the respective factors of economic agglomeration and economic growth, the study discusses the role of growth poles of the central economic city in regional economic development. Secondly, the study uses Gini-coefficient to Assess the trends of non-agricultural industrial spatial concentration in recent years in Henan, and adopts Shift-Share Analysis approach (SS Analysis in short) to assess the industrial comparative advantage from inside and outside the central economic cities of city group.Thirdly, this article establishes simultaneous equations of urban economic agglomeration and economic growth in the form of a general Cobb-Douglas production function and uses the spatial panel data on three levels Cities (prefecture and higher level cities, county level cities and rural counties) in the whole province for fixed effects model analysis with instrumental variables and section analysis of economic growth equation for each year. The comprehensive estimations show that the relative concentration of non-agricultural industrial and economic growth are reciprocal causation and strengthen each other, however, the spatial density of non-agricultural employment is relatively high, and have produced significant congestion effect and inefficiency; in term of factor inputs, especially capital element, are crucial to promote urban productivity; opening-up condition contributes to the improvement of industrial agglomeration and productivity; It is worth noting that prefecture and higher level cities of Zhongyuan city group have strong inhibition effects on the economic growth of cities and counties at all levels,which remained stable in recent years. In conclusion, on the basis of the above analysis, this article puts forword the corresponding policy implications of the findings .