The Impacts Of Public Goods Supply On Industrial Agglomeration

Along with the rapid growth of economy in our country, the phenomenon of theunbalanced regional economic development attracts more attention, industrialagglomeration as an important phenomenon in the process of regional economicgrowth also affects the economic development. To change the trend of thedevelopment of the non equilibrium, government behavior plays an important role,and the public goods supply, as a kind of government investment has a positive role inthe formation of industrial agglomeration.Public goods can promote industrial agglomeration by two aspects: one is directinvestment drive, on the other hand is the different categories of public productchoose different way to impact on output efficiency and elements flow so as topromote industrial agglomeration. Theoretical analysis results show that theexternalities of public goods can improve consumers’ welfare at the same timeincrease the profits of producers, the consumers and producers’ consistencybehavior promote the industrial agglomeration."Center-periphery" model analysisshowed that improving the level of the supply of public products can lower the cost ofliving and the production cost, transaction cost, etc., guide elements flow to the areaof public products supply advantages, then form industrial agglomeration. On thebasis of theoretical analysis, we carried on the empirical analysis research on therelationship between the public goods supply and industry agglomeration in ourcountry. Research results showed that all kinds of public product promote theindustrial agglomeration. The supply of public products in the eastern region and panYangtze river delta, Pan-pearl river delta, Bohai sea economic zones is generallyhigher than the central and western regions, and for the promotion of industrialagglomeration effect is more significant.From the above analysis, to accelerate the formation of the regional industrycluster, the supply of public goods is the important material guarantee. Therefore, weput forward policy suggestions as follows: Expand the scale of public goods supply,create a good physical environment for industrial agglomeration; Adjust the structureof public goods supply in different areas, in order to meet the needs of the industrialagglomeration; To improve the efficiency of public goods supply, give full play to therole of industrial agglomeration driving. In addition, increasing support for the underdeveloped regions through the public products supply, improving the regionaleconomic policy guidance, can promote the formation of industrial agglomeration;realize the coordinated development of regional economy.