Spatial Technology Spillovers Of The Agglomeration Of Chinese Manufacturing Industries

Since the establishment of The People's Republic of China, especially in the three decades after the implementation of the reform and opening up policy, Chinese manufacturing industries have had a sustained and rapid development, which is a strong impetus to the process of industrialization and modernization, and enhances the country's economic power and comprehensive national strength. However, compared with the advanced manufacturing countries in the world, Chinese manufacturing industry is still big but not strong. From the initial development up to now, it has been responsible for Made-in-China role. There is a great gap in the capacity of independent innovation compared with developed countries. At the same time, the degree of spatial agglomeration of Chinese manufacturing industries has also been deepened; many manufacturing industries continue to concentrate in a few provinces on the east coast of China, and the employment of Midwest manufacturing account for an increasingly lower share of the country. This paper attempts to adopt the industrial agglomeration theory of new economic geography to analyze the spatial technology spillovers effect of the agglomeration of Chinese manufacturing industries, thus providing a theoretical basis for the optimization of the agglomeration of manufacturing industries, to improve regional technological innovation capability.This paper is intended for spatial technology spillovers effect of the agglomeration of Chinese manufacturing industries. Firstly, the paper uses an endogenous economic growth model established by Fujita and Thisse in 2003 to construct a theoretical model, and then investigates the effect of the agglomeration of manufacturing industries variable, institutional environment variables on regional technological innovation and spatial technology spillovers. The study shows that the agglomeration of manufacturing industries has a significant role in promoting regional technological innovation, while the more favorable institutional environment, and the higher the level of innovation in this region, the higher the spatial technology spillovers effect. Secondly, the paper has a further empirical study of the effect of the agglomeration of manufacturing industries on spatial technology spillovers, the paper selects the panel data of China's 30 provinces, autonomous regions and municipalities from 2003 to 2012, the transaction value in technical markets is a key indicator to measure regional spatial technology spillovers, and the number of granted patents application is a key indicator to measure the technological innovation in a region, and then introduces the agglomeration of manufacturing industries, the legal system, the marketization level of real economy, the marketization level of the fictitious economy three institutional environment variables in a region,and their interaction terms with the agglomeration of manufacturing industies, the paper uses instrumental variables two-stage least squares method to test the theory mechanism empirically. The results show that the agglomeration of manufacturing industries alone does not have a positive impact on technological innovation; positive spatial technology spillovers effect is also not generated. After introducing institutional environment variables, the interaction term of the agglomeration of manufacturing industries and legal system has a significant positive role in promoting technological innovation and spatial technology spillovers. Finally, considering economic development and institutional environmental conditions of eastern, central and western regions of China, the corresponding policy recommendations are put forward on how to optimize the spatial layout of the agglomeration of manufacturing industries to promote spatial technology spillovers effect of the agglomeration of Chinese manufacturing industries.