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Research on Industrial Structure, Knowledge Spillover and Economic Growth in Chinese Cities

Author: WangNing
Tutor: LongFenJie
School: Tsinghua University
Course: Management Science and Engineering
Keywords: city economic growth industrial structure knowledge spillover China
CLC: F124
Type: Master's thesis
Year: 2010
Downloads: 267
Quote: 0
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Abstract


Undergoing a profound change of Chinese society, the rapid urban growth is one of the basic characteristics. The transformation of urban growth mode plays an important role in changing of the economic development pattern of the country. Especially, endogenous growth has become a development trend of cities. Based on the characteristics of urban industrial structure and knowledge spillover in China, this paper studies the mechanism between industrial structure and economic growth by using both theoretical and empirical analysis.The neoclassical economic growth theory assumes that the returns to scale unchanged, that economic growth depends on capital and labor inputs. Increasing returns to scale is observed by the endogenous growth theory, which reveals urban long-term economic growth depends on the technology progress and human capital accumulation. Aggregate economics theory indicates the importance of urban spatial structure to the economic growth. Researchers of new economic geography study urban growth from spatial dimension, in order to make up the lack of space study of the endogenous growth theory.Based on the theories above, and considered knowledge spillovers as a breakthrough, this paper establishes a theoretical model to connect industrial structure and urban economic growth together. The model indicates: industrial structure is a significant effect on the efficiency of knowledge spillovers, thereby improving economic growth. In the long term, cross-industry knowledge spillover is much more important. Compared to the cross-industry spontaneous spillover of knowledge, planned guiding of knowledge spillover by government is more efficiently to promote urban economic growth.Based on the theoretical model, an empirical Panel Data model is established by using 2000-2008 Chinese urban economic data. The regression results shows that, Chinese urban growth relies more on inputs, and is lack of endogenous growth force from 2000 to 2008. Urban industry knowledge has significant influence of urban economy and the competitive cost is higher than agglomerative benefits which are brought by industrial diversification. For specific industry, the monopoly and diversification of urban manufacturing industry, as well as the local agglomeration of the third industry are all conducive to the growth of urban economy.Based on the research conclusion above, this paper suggests, it is necessary for the city government to encourage knowledge innovation, as well as to adjust industrial structure through industrial policy, which can increase the total knowledge capital and the efficiency of knowledge spillover. The city government should improve targeted cross-industry knowledge spillover, such as putting mature traditional industries and the new industry together, putting high technology industry and potential low technology industry together, as to achieve economic growth of optimal equilibrium. According to the agglomeration characteristics of different industry, the city government should also formulate targeted industry development policy.

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CLC: > Economic > The world economic profiles,economic history,economic geography > China's economy > Economic construction and development
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