Analysis Of The Spatial Agglomeration Of FDI In Tianjin From The Perspective Of New Economic Geography

As a new emerging subject, the New Economic Geography has reintroduced the spatial factor neglected by the Mainstream Economics for a long period into the general equilibrium frame. It analyzes the endogenous forces of spatial distribution of the industrial activities in micro-economic basis and provides a theoretical basis to explain the phenomenon of industrial clusters in reality. By combining theoretical and empirical analysis, firstly, this paper systematic referenced theory evolution, basic models, and main insights of the New Economic Geography and reviewed the related literature. Secondly, this paper analyzed the formation and development of the FDI agglomeration in Tianjin since the reform and opening-up policy. After this part it measured the agglomeration level of 20 main manufacturing industries in Tianjin from 2000-2008 by using industrial clustering method of Location Quotient. On this basis this paper tested the correlation between FDI and industrial clustering in 20 main manufacturing. This paper also investigated the influential factors of agglomeration by using core-periphery model. At last, the countermeasures and suggestions are taken on how to effectively utilize FDI in Tianjin.This paper is divided into six chapters, with the main themes of each chapter as follows: the introduction part proposes the main objectives of the research. At the same time this part explains the basic methodology and the main ideas of this paper.Chapter two is focused on the theory evolution, basic models, and main insights of the New Economic Geography. The basic models include: core-periphery model, city model and the international specialization model. The main insights involves: the home market effect, the accumulation of casual relationship, the endogenous non-symmetry, the location of the viscous, the logic of mutation , the self-realization of expectation, the agglomeration rent and so on. All these analysis make us understand the theoretical framework of the New Economic Geography more easily. In addition, the related reviews of literature are put forward from domestic and foreign aspects.The third chapter adopts detailed figures to explain the formation and development of the FDI agglomeration in Tianjin. It can be divided into three periods. The first period: there was a gradual increase in the quantity of FDI from 1978 to 1991; the second period: the number had spurted from 1992 to 2005; the third period: there had been a breakthrough in the use of FDI after the year of 2006.The fourth chapter analyses the spatial concentration of industry in which FDI invested under the background of industrial clustering, which is explained from the perspective of New Economic Geography. Then the writer discusses the mutual relation between FDI and industrial clustering and brings forward the circular and cumulative causation mechanism. According to empirical analysis, this paper measures the agglomeration level of 20 main manufacturing industries in Tianjin from 2000-2008 by using industrial clustering method of Location Quotient and uses the statistical software of SPSS to test correlation between FDI and industrial clustering in 20 main manufactures in Tianjin.The main research of New Economic Geography is centripetal forces and centrifugal forces of agglomeration. On the basis of above analysis, the fifth chapter studies the influential factors of the agglomeration of FDI in Tianjin from the effect of centripetal and centrifugal forces on economy. From the core-periphery model, it can be inferred that centripetal forces consist of market potential, transport costs, economies of scale and knowledge spillovers. Centrifugal force includes the trend of becoming more high-tech in FDI, congestion effects, backward and forward linkages in production and the environment of investment.The sixth chapter is about major policy suggestions: first, improve the quality of FDI which is spatial concentrated in Tianjin. Second, strengthen the circular and cumulative causation mechanism between FDI and industrial clustering. Third, industrial supporting systems should be built up to strengthen the linkage between MNCs and local enterprises. Fourth, technology and system innovation should be enforced to form a regional innovation system. Fifth, accelerate the development of modern service industry so as to improve the city's services. Sixth, improve the investment environment.