Industrial Agglomeration And Total Factor Productivity Research Of Manufacturing In Yangtze River Delta

Since the concept of "Yangtze River Delta" was put forward, economy of Yangtze River Delta has been developing rapidly and its achievement is astonishing. Accompanying its economic growth, unbalanced development is getting more serious and the difference of Total Factor Productivity (TFP) is the key to the problem.Most researches about TFP use ordinary least-square estimation, based on time series data or cross section data. The former ignores the possibility of agglomeration and the later assumes that all observations are the same, ignoring the difference between them. So, this paper is from the standpoint of spatial econometrics. Based on the detailed introduction of spatial clustering and analytical method, the paper firstly calculates global Moran’s I by statistical data of industrial enterprises above designated size in 25 economic units in Yangtze River Delta, indicating that there is obvious spatial agglomeration in 15 industries and development of manufacturing in different units are relevant. Secondly, the paper discusses the spatial agglomeration structure by local Moran’s I, certifying that development level of manufacturing in different units is different and the agglomeration structure changes during different periods.Based on above conclusions, the paper builds Geographical Weighted Regression model (GWR) to calculate TFP of manufacturing in Yangtze River Delta and compares its outcome with OLS. The research finds that:(1) geographical weighted regression is really better than least-square estimation. It can reflect driving force of different regions;(2)TFP calculated by GWR is higher than OLS, indicating that spatial impact affects TFP and industrial agglomeration can pull TFP of manufacturing; (3) TFP of Clothes, Shoes and Caps Products reflects that, TFP growth and TFP contribution to economy growth match with the agglomeration model---TFP growth and TFP contribution to economy growth are high if the agglomeration level is high.At last, based on the research, the paper comes up with several suggestions to industrial layout adjustment and balanced development.This paper is not only a new attempt about spatial econometrics, but also a new interpretation of industrial agglomeration and TFP of Yangtze River Delta. Maybe the conclusion is helpful to policy making of regional development.