The Impact Of Foreign Trade On Regional Manufacturing Industry Agglomeration

Foreign trade and industrial agglomeration has always been the focus of economics research. With the birth of new economic geography, it is the associated interaction between foreign trade and industrial agglomeration that arouses a new round enthusiasm on relational theory of industrial organization. Moreover manufacturing which plays a decisive role in Chinese economy is the pillar industry of Chinese national economic and the foreign trade is one of "Troika" driving Chinese economic growth. In order to demonstrate the effects under the situation of Chinese economy of foreign trade to industrial agglomeration, this article, on the basis of new economic geography and new trade theory, through the interaction mechanism between foreign trade and industrial clustering architecture evaluates the trend of Chinese foreign trade and manufacturing industry agglomeration at different periods and space. It discusses the influences of foreign trade on the industrial agglomeration and puts forwards proposed conclusions and policies. Following are the contents of this paper:1.Summarize relevant theories and documents, discussing the interactive mechanism between the two aspects, and then lay the theoretical foundation for later study.2.Study the trend of foreign trade, analyze the modes of trade and trade structure respectively from the perspectives of overall and regional; research the industrial agglomeration path respectively from the perspectives of regional and industry.3.Mainly examine the positive effects of industrial agglomeration to foreign trade by constructing econometric model, analyze the other factors on industrial agglomeration basing on the relevant literature review; using the system GMM to explore other factors which influence the degree of industrial agglomeration and direction of action. The results show that transport conditions, the level of financial development, human capital endowments as well as domestic market potential for the space industry have a positive active role in the gathering, and tax policy has a significant negative effect on it.4.The empirical test shows an inverted U type and nonlinear relationship between foreign trade and regional agglomeration. But for all samples the trend of foreign trade are located in the left side of the inverted u-shaped curve. So it indicates that foreign trade has accelerated the impacts of manufacturing regional gathering.