Study Of China’s Industrial Agglomeration And Government Action Based On NEG Theory

Since Reform and Opening Progress, China’s industrial development presents features like "Closed regional cooperation""Government’s important role" and so on. The current academic researches of industrial agglomeration focus on technology spillovers, economy scale, transportation and other new economic geography factors, and these factors are helpful in explaining the first feature; however, most studies ignore the impact from government acts on the industrial agglomeration, and thus they can not explain the second feature.In this paper, Chinese high-tech industry is mentioned as an example to study the impacts both from new economic geography and from government action on industrial agglomeration. Based on the comparison between Yellow River Delta, Yangtze River Delta and Pearl River Delta, certain suggestions are made for the promotion of high-tech industry gathering in China.The article first attempts to use game theory to prove that "right decisions made by governments can promote industrial agglomeration", and the above conclusion is considered as a theoretical basis for empirical analysis below. Next,25provinces’ panel data from1998to2009are chosen to verify that the new economic geography and government behavioral factors affect high-tech industry gathering. Empirical results show that:new economic geography, positive externalities and market capacity increase the accumulation of high-tech industry, postal savings business and transport infrastructure of high-tech industry concentration have no significant effects; government behavior, regions of high-tech industry concentration and degree of openness have a significant influence. Government intervention will prevent the occurrence of agglomeration, the government’s financial support for high-tech activities and high-tech industry concentrations have an "inverted U" relationship. It is obvious that in addition to the role of outside economic geography, government action is also triggered an important factor in high-tech industry cluster.In addition, the influences of new economic geography and government action on China’s different high-tech industry clusters are not the same, In the new economic geography aspect-the Yangtze River Delta region with high-tech industry concentration was significantly positively related to knowledge spillover and economic development, and Pearl River Delta region high-tech industry concentration was significantly positively related to level of economic development, high-tech industry cluster with the Yellow River Delta significantly associated with knowledge spillovers, human capital and economic development. In the government action aspect, the opening degree of the Yangtze River Delta, Pearl River Delta and Yellow River Delta of high-tech industry concentrations were significantly positively correlated.Finally, based on empirical research, the author makes a few suggestions for concentration of high-tech industry in China.