Market Segmentation,Factor Mismatch And Economic Convergence

In 2018,the integration of the Yangtze River Delta has risen to a national strategy.The Three-Year Action Plan for the Integration of the Yangtze River Delta(2018-2020)states that by 2020,there will form a worldclass urban agglomeration framework.However,the development of this urban agglomeration faces many problems.There are still large imbalances and uncoordinated development among the 26 prefecture-level cities.Market segmentation and factor mismatching still exist and hinder regional integration development.Therefore,this paper mainly studies the relationship between market segmentation,factor mismatch and economic convergence in this agglomeration,and provides theoretical support for its further development.Firstly,this paper empirically analyzes the characteristics of the economic convergence of three urban clusters including the Yangtze River Delta,the Pearl River Delta and the Beijing-Tianjin-Hebei.The results show that the Yangtze River Delta urban agglomeration has the characteristics of consistent ? convergence,and the other two agglomeration have local ? convergence.There are obvious absolute ? convergence and conditional ? convergence in the three urban agglomerations.This result indicates that the gap in per capita income level in the Yangtze River Delta has been significantly reduced,and the economic growth rate of the backward regions in the three urban agglomerations is faster than that in the developed regions.Secondly,this paper builds the market segmentation index of the Yangtze River Delta urban agglomeration based on Samuelson's “glacier cost” model.The data measurement results show that the market segmentation level of this urban agglomeration is generally weakened.This paper uses the price "tax" method to describe the factor mismatch indicators at the urban level.The empirical results show that the phenomenon of factor mismatch is still widespread,and many cities have experienced labor and capital elements from scarcity to excess.Finally,this paper uses the panel data from 2004 to 2016 to explore the relationship between market segmentation,factor mismatch and economic convergence by constructing a fixed-effects model,.The empirical results show that when the supply of capital and labor factors is excessive,the mechanism of this effect is not obvious;but when the supply of these factors is insufficient,the market segmentation will aggravate the degree of factor mismatch,and the factor mismatch is not conducive to the economy convergence,so market segmentation has a negative impact on economic convergence through the mechanism of factor mismatch.Based on the above research,this paper proposes policy recommendations such as further breaking down administrative barriers,strengthening infrastructure construction,improving marketization level,and adjusting industrial structure,to promote the further development of the Yangtze River Delta urban agglomeration.