An Empirical Anrlvsis To The Determinants Of China’s Textile Industry Geographic Distribution

With the revival of spatial economics, spatial characteristics of economic activitywere rediscovered. As a traditional pillar industry of national economy and importantexport industry, the spatial distribution of textile industry in China was striking.Through the measurement in the year of1997,2002and2007, this study findagglomeration in textile industry was obvious, what s more, textile industry wasconcentrated in the eastern coastal areas. Why textile industry concentrated in theeastern coastal areas?This study tries to find factors which caused textile industry agglomeration.Comparative advantage and local protectionism in China are traditional factors thatimpact the geographic distribution of textile industry. In addition, globalization andeconomic transition offer the possibility for the application of New EconomicGeography in China. Therefore, the New Economic Geography factors becomeshould not be ignored. Based on three kinds of factors above, this study puts forwardfive hypothesizes, which help to understand the mechanism of the agglomeration oftextile industry in China. Hypothesizes include:(1) As a traditional labor-intensiveindustries, the textile industry tend to locate in areas rich in labor resources;(2)According to the law of increasing scale returns, the textile industry tend to locate inareas with larger market and better infrastructure;(3) In order to save transportationcosts, the textile industry, which is intensive use of industrial intermediate inputs, tendto locate in areas with strong foundation of industries;(4) In order to savetransportation costs, the textile industry, which rely on foreign trade, tend to locate inareas closer to foreign markets;(5) The local government has different motivations indifferent periods for the space distribution of textile industry, it tends to protect localenterprises in the textile industry in the early stage of development, while accelerateits relocation late in development.By setting a model including comparative advantage, new economic geographyand local protectionism, which use a two-dimension data of province/industry from 2003to2007, this study tries to verify hypothesizes established or not. Regressionresults indicate that：Labor force endowment is very attractive for textile industry, sohypothesis (1) has been confirmed. But restricted labor mobility partly offset theeffect of agglomeration caused by labor force endowment, which means labormobility becomes dispersion force for the agglomeration of textile industry;Hypothesis (2), hypothesis (3) and hypothesis (4) are also been confirmed. With theadvantages such as huge market potential, good industrial foundation and lessdistance from foreign market, eastern coastal areas in China attract capital into textileindustry, including private capital and foreign capital, which contributes theagglomeration of textile industry. And what about hypothesis (5)? Localprotectionism has a significant effect on spatial distribution of textile industry. Thiseffect is manifested as regional policies such as rebating the export tax and buildingindustrial development zone, which reduced the motivation of migrate of firms.