Regional Comparative Advantage And Regional Leading Industry Choice

What kind of industry can be developed in a region is depends on what kind of endowment this region has. Since different regions have different factor endowments and market environment, leading industry selection should give full play to the regional comparative advantage, and develop industries with local characteristics. Only choose leading industry in this way can it be viability and competitiveness.This paper tries to analyze the problem of how to choose regional leading industry from the perspective of regional comparative advantage, based on the principle through the theoretical and empirical research. Firstly, this text combs the theoretical development and empirical research of leading industry domestic and abroad, according to relevant theories of regional economics and industry economics. Secondly, after discussing the meaning of leading industry and the current problems of regional leading industry choice datum, it analyzes four reasons that lead to these problems. Through the comparative analysis of economics whose economic performance are success or failure due to the choice of different benchmark, it concludes that the governors should attach great importance to regional comparative advantages when choose regional leading industries. Then this thesis puts forward the connotation of regional comparative advantage, and points out that factor endowment is the determination of it. Thirdly, this paper gives the importance of regional comparative advantage in the adjustment of regional industrial structure, and expounds five reasons about why using regional comparative advantages as the main benchmark when choosing regional leading industry in detail. Then an analytical model is designed to examine the relationship between regional dominant industry and regional comparative advantage, so as to discuss the mechanism of regional leading industry and use this relationship to design some regional leading industry selection rules. Fourthly, this paper describes the current development situation of leading industry in Zhejiang and analyzes regional comparative advantage of Zhejiang. It chooses the data of Zhejiang industry between 2004 and 2014 and uses the analysis model to prove the strong relationship between regional comparative advantage and leading industry. Then it calculates the leading industry in Zhejiang over the years using the designed index system. And it uses the theory of comparative advantage to analyze the change of dominant position of six representative industries respectively.The innovation of this paper is that it provides a micro perspective to understand the transmission mechanism between regional comparative advantage and regional leading industry: the change of regional comparative advantage will leads to the change of regional leading industry. Besides, It builds a new selection index system of leading industry, based on regional comparative advantages, and chooses capital-labor ratio and designs comparative material capital, comparative human capital and comparative labor force capital as the measure gauge.