Analysis For The Reasons Of Capital Agglomeration Based On The New Economic Geography Perspective

As the most advanced city in the flow of China's economic innovation during 80's of the last century, Wenzhou has created an impressive economic miracle. Even suffering the poor geographic condition, as well as the lack of government investment and natural resources, Wenzhou, has developed a certain pattern of "small product, big market" as the Wenzhou economic mode. This mode stimulated the agglomeration of the capital, thus accelerated the development of Wenzhou's economy in the last 20 years.However, these years, the driving power of this kind of development has decreased. As an instance, the enterprises are moving away, and so are those certain dominant groups for mining, housing and art. Capitals, along with the local human resources, are deviating from Wenzhou in the search of new potential profit space. As we all know, the flow of capital is a crucial element which has significance on the level of economic increase, whether from a long-term perspective, or a short-term one. In that case, the out flow of Wenzhou's capital will have a great influence towards the development of Wenzhou's economy. Since it comes to a bottleneck, the diffusion and agglomeration emerge as a research object, which may help Wenzhou's economy solving the trapped position and turning back to the right developing trick, in order to give executive suggest on policies.To some extent, the thesis has overcome the theoretic limitation of the narrow understanding which only concentrates on the diffusion and agglomeration. By using the neo-economic geography theory on this Wenzhou case, the thesis focuses on the Wenzhou capital, analyzing the elements such as market potential, tax competition, stockings of nontradables and density of enterprises which get involved with capital process. One unique points of this thesis, is that the author uses a new perspective of demonstration to analyses the reason of capital agglomeration.The thesis consists in five parts:The first chapter is the introduction which introduces the background of the topic, significance and innovation of this research and the summary of references.The second chapter is mainly about the introduction of new economic geography. This part explains the core-periphery model and the regional and urban system model, providing a theoretic base for the next chapter.The third chapter focuses on the history of the capital diffusion and agglomeration in Wenzhou, describing the historical process, and analyzing the internal elements from a theoretic perspective.The fourth part examines the reason of capital agglomeration. By building the basic tasks as the model formula, the thesis has examined the data, and analyzed the related results.The final chapter is for the conclusion and the policy suggestion. By rising up possible suggestions and advices, which are based on the analysis and examination mentioned above to accelerate the development, this part of thesis ends up by summarizing the whole article.