Research On The Effect Of China’s Manufacturing Industrial Agglomeration On The Income Distribution

In recent years, our country’s economy maintained a steady growth trend. People’s living standard has been improved. But the imbalance of income distribution between regions still remained. The eastern region of our country, especially the eastern coastal provinces and cities, has a higher growth rate of the per capita GDP than that of the western region. Residents’ disposable income and living standards are in the lead level across the country. At the same time, with China’s manufacturing industry in the geographic distribution also has concentrated in the eastern regions, and the lack of development in the western region. From this perspective, this paper tries to find out the inner link between manufacturing agglomeration and income inequality. Through the combination of theory and empirical research method, we analyze the relationship of development trend of the manufacturing agglomeration and the changes in regional income distribution gap exist. We can develop a new method to solve the problem of income distribution in our country on these basics.The purpose of this article is to study the relationship between manufacturing agglomerations to regional income distribution gap. Manufacturing industry is the core of the industry in China, and it plays a key role in the development of economy, it is representative of the industrial agglomeration, and this article analyzes the macroeconomic agglomeration, so we choose manufacturing agglomeration level as the research object to measure our country’s industrial agglomeration. First, we study the relevant literature of manufacturing agglomeration and income distribution summarizes the related theory foundation to prepare for the following analysis. Second, we review and summarize the present situation of the development of China. Through collection and processing of data and the analysis of relevant economic phenomena and the related economic activities, we find out the relationship between manufacturing agglomeration and the income distribution. According to this, we analyze the transmission mechanism of manufacturing agglomeration and the income distribution. Finally, we choose China’s gini coefficient, manufacturing concentration index as a core variable, and introduce the degree of government intervention, economic openness indicators as two control variable in the VAR model, and makes an empirical analysis from the perspective of dynamic. The results confirmed that the manufacturing agglomeration can lead to the unfair distribution, thereby expanding the income distribution gap between area, and the other two variables have a different impact on income distribution in different periods, with the intervention of government, the income distribution gap between area will reduce in a relatively short period of time, but the government’s intervention will expand the income distribution gap between area in the long-term. On the contrary, the foreign openness will narrow the gap between regional income distributions. Finally, according to the above theoretical foundation and empirical analysis, we draw a conclusion and puts forward some corresponding measures combined with the actual conditions of China.