| How the changes in circulation cost affect the manufacturing,, industry agglomeration is an important issue. While economic scholars focus on industry agglomeration and its mechanism, they did not fully discuss it with the link between the circulation cost changes. However, Paul krugman, Nobel prize-winning economist, has put forward the "center-periphery" model for the industrial spatial agglomeration, trying to prove the influence of transportation cost on the choice of the investment of the firm from the aspects of theory and practice. At the same time, he also has a research on the industry association, the price effect and the local market effect, build up the correlation analysis of the circulation cost and manufacturing industry agglomeration. This paper will take the circulation cost as the entry point, combine the industrial relevance theory and the new economic geography theory, and build a framework for the analysis of the circulation costs and the agglomeration of manufacturing industry. On this basis, through the empirical analysis to explain the phenomenon of China’s manufacturing industry agglomeration.This paper intends to use Krugman’s "center-periphery" model, through circulation costs and circulation supply capacity of these two core concepts, the use of comparative static analysis to study the mechanisms of circulation changes in the cost of manufacturing space agglomeration. Specific analysis of the structure and procedures are as follows:Firstly, the paper reviews the theoretical literature on the changes of the cost of circulation and the agglomeration of manufacturing industry, and focuses on the extension and measurement methods of the circulation cost; Secondly, combined with the new economic geography and industrial relevance theory, the mechanism of the cost change and the spatial agglomeration of manufacturing industry is analyzed. Thirdly, based on the construction of the model, the empirical analysis and test of the distribution costs and the spatial agglomeration of manufacturing industry are carried out.We used 2004--2013 years of relevant data of China’s industrial economy, by analyzing the circulation cost structure, circulation costs were calculated for each region of the dominant and recessive circulation costs. The empirical results show:(1) Regional differences in circulation costs are significant. There is a negative correlation between the circulation cost and the agglomeration of manufacturing industry. And the influence of the dominant circulation cost on manufacturing agglomeration is nonlinear. What’s more, with the continuous improvement of the market economy, the labor, time, etc., which need to get and maintain efficient circulation channels, are becoming more expensive. So the effect of the recessive circulation costs on the manufacturing agglomeration industry is highlighted. (2) The transportation efficiency of the circulation industry is positively related to the manufacturing agglomeration. Empirical analysis tends to explain, with the rapid development of manufacturing industry, the competition between manufacturers will gradually evolve into the channel of circulation. The smooth flow channel can improve the transportation efficiency and promote the supply capacity of the circulation. Then manufacturers can transport products to the consumer market. On the contrary, if the supply capacity can’t meet the needs of the manufacturing industry, the circulation cost will be a negative factor affecting the manufacturing agglomeration.Based on the above theoretical analysis and empirical test results, the difference of the circulation cost of each region of China is the main factor that affect the development of manufacturing industry. This factor is intertwined with the manufacturers’ investment, the formation of the professional market and other factors, which will have an important impact on the spatial agglomeration of Chinese manufacturing industry. Reducing the cost of circulation, not only need to improve the inflexible conditions, but also need to strengthen the flexible conditions. And the improvement of the development level of manufacturing industry will be required to update the circulation supply capacity. However, analysis of the manufacturing industry agglomeration from the perspective of the circulation cost, which is a sub project of the influence of circulation industry on the spatial agglomeration of manufacturing industry. The further study of this sub topic will also be involved in many problems, which need to be further expanded and analyzed. |
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