A Study On The Impact Of Industrial Clusters On Regional Economic Growth

As global economy become more industrialized, industrial clusters has become a more effective and important role in the growth o f regional economy. As more regions are now aware o f the importance o f industrial clusters, a number o f regions and industries have adapted the structure o f industrial clusters as the primary strategy in its regional growth. For instance, the city o f Shanghai has always put emphasis on its automobile industry, referring to it as one o f the city’s six primary industrial sources. Furthermore, then Shanghai Automobile Industry Corporation(also known as SAIC group) has built two automobile factories based in the area o f Jiading and Pudong, forming a significant scale o f uauto-industrial clusters.^ Its purpose is to study and analyze the effectiveness o f industrial clusters positively affecting Shanghai^ regional growth, as the city is also known to be China’s “central economy”.This dissertation reviews the studies o f industrial clusters on a global scale firstly, based on these studies; intending to prove that companies and enterprises can reach what is known as “external economy o f scale” by adapting the structure o f industrial clusters. This structure reduces an enterprise’s cost and increases its productivity. At the same time, industrial clusters attract a large number o f quality workers, innovative talents, and investors as well; ail these factors eventually not only become the primary foundation o f regional growth, but bring competitiveness into the region as well. Secondly, to further prove that industrial cluster has a positive influence on a region^ economical growth, this report performs an experiment on the automobile industry in Shanghai, To execute the experiment, a linear function between the size o f industry cluster and local economic growth is tested. This experience uses software such as Fi Vievvs 6.0 based on relevant statistics from the year 1998 through 2012. Results have shown that the main factors o f auto-industrial clusters are: the number o f workers within the industry; the industry’s net worth; and the amount o f products produced by the industrial itself in relevance to a region’s total production. The ultimate purpose o f this report is to suggest how to effectively improve industrial clusters from not only an industryenterprise^ stand point, but also from the government’s point o f view based on the studies stated above targeting the automobile industry in the city o f Shanghai.