Industrial Agglomeration,Knowledge Spillovers And Urban Economic Growth An Empirical Study On Zhejiang Province

With international increasing competition and cooperation and factors of production specialized collaboration, industrial agglomeration phenomenon widespread throughout the world. The emergence of industrial agglomeration promote regional economic growth as well as strengthen the regional knowledge spillover. Yet, the existing literature does not reached an unified understanding about how specialization and diversification effect economic growth. This paper research the effect of industrial agglomeration and knowledge spillovers on zhejiang province under the perspective of space based on cities in zhejiang province and it is helpful to the further development of zhejiang economic better and faster.First, this aritical related research status were sunmaried. The part of theoretical firstly introduced the development of industrial agglomeration theory, the classification of agglomeration economic and the agglomeration’s economic effects. Then introduced the theory of knowledge spillovers including the conception of knowledge spillovers,the way of knowledge and the economic effects of knowledge spillovers.Finally elaborated the interaction between industrial agglomeration and knowledge spillovers, and the mechanisms how industrial agglomeration promote economic growth.Secondly, according to the related theories, the paper put forward the research hypothesis and research model. First of all, calculated cities’ specialization and diversification in Zhejiang province. Then, evaluated the knowledge spillovers considering the Regional Absorption ability. This paper found that the provincial capital Hangzhou as the representative of the cities sh fect on other parts. Other areas of the absorbing capacity strong and close to the developed areas absorbing more knowledge spillovers.Thirdly, Spatial correlation test on the dependent variable that GDP of11cities in ZHEJIANG province showed that there is a correlation in space. Then a spatial panel model were build to study how cities’ industrial agglomeration and the knowledge spillovers influence economic growth in zhejiang province. The empirical study proved that industrial agglomeration and the knowledge spillovers had positive effect on urban economic growth in zhejiang province. Research showed that urban industrial diversity and the knowledge spillovers to economic growth had played a significant role in promoting. Specialization influence on urban economic growth is positive but not significant. For agglomeration and the knowledge spillovers interaction effect, the results consistent with our expectations. Industrial agglomeration and the knowledge spillovers promote each other.Finally, based on the empricial results,we put forward policy recommendations to advance economic development in ZHEJTANG province, such as strengthening exchanges and cooperation between cities, improve the quality of workers through education, adjusting the industrial structure transformation of economic development.