The Research On City Size, Industrial Diversification And Specialization

City is the place where all kinds of socio-economic factors aggregate, and the physical space where the city economy survives. With China's rapid economic growth and accelerating urbanization process, more and more scholars started to investigate the city. The Pearl River Delta is the earliest place where market reform took place. After 20 years of development, China's most characteristic industry cluster has been built there. But recent years, the Pearl River Delta is facing troubles with industrial transfer and restructuring. Hence, we need to know what affects the distribution of industries among the cities, what kind of industry is going to aggregate in the city with given city size, and How should the cities adjust their industrial layout according to the Law of Industrial Clustering.Combined with the achievements and shortcomings of the research to the problems of city size, industrial specialization and diversification, this paper will investigate the relationship among the city size, industrial specialization and diversification, using theories of industry cluster, specialization and diversification and city size.First, the paper analyzed the factors which affect the industrial specialization, diversification, and city size. We found that the factors which affect the industrial specialization and diversification are factor endowment, demand preferences, economies of scale, externalities, transport costs, and so on. The factors which affect the city size are agglomeration forces and dispersion forces. Agglomeration forces include localization economies and urbanization economies. Dispersion forces include the congestion costs and the dispersion caused by the transportation costs. Since industrial specialization, diversification, and city size are influenced by agglomeration economies and agglomeration diseconomies, economies of scale, externalities, and transport costs have impacts on both.Second, begin with the factors that influence industrial specialization, diversification, and city size, we analyzed the formation mechanism of industrial specialization and diversification, and the relationship among the three. We can further conclude that cities specialized in different industries have different sizes, while cities specialized in similar industries have similar sizes. Considering various factors, sizes of the diversified cities are bigger than that of the specialized cities. Third, after processing large amounts of data, the paper calculated the indexes of the diversification and specialization in the Pearl River Delta, and made empirical analysis to the relationship among the specialization, diversification and city size.Finally, based on the above analysis, the paper made policy recommendations to the coordinated development of the Pearl River Delta.