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Industrial Agglomeration、Infrastructure and Productivity

Author: GuoYuJiao
Tutor: SunXiaoHua
School: Dalian University of Technology
Course: Industrial Economics
Keywords: Agglomerationn Infrastructure Productivity
CLC: F062.9
Type: Master's thesis
Year: 2013
Downloads: 57
Quote: 0
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Abstract


Industry agglomeration is the highly concentrated process of related industry and capital elements within the space. Industry agglomeration can bring scale or regional economies, and improve production efficiency by gaining economies of scale, sharing and promoting labor resources and exchanging knowledge. With the gradual development of industrialization, industrial agglomeration has been Government’s important strategic to enhance regional competitiveness and local economy in provinces and cities. Meanwhile, in recent years of economic crisis, the outstanding performance of public infrastructure raises particular awareness that not only infrastructure investment itself can contribute to the economic development by causing a series of multiplier effect, but also its externalities can expand the positive effect of industrial agglomeration to labor productivity. When measuring the effects of agglomeration effects, it is necessary to consider the contributions of infrastructure.This article will study the linkages between agglomeration effects and infrastructure and productivity by extending Ciccone models in terms of spatial density of economic activity. This research is broadly divided into the following framework:Firstly, there is a research review of classic theory and real-world experience in industrial agglomeration from at home and abroad, as well as the role of public infrastructure in the agglomeration economies. Secondly, on the basis of the literature review, it further outlines the theory mechanisms of the influence of industrial agglomeration effects and infrastructure to the productivity. Then it gets an extended model that more in line with actual situation by adding infrastructure as an extension of the model variables under the Ciccone framework. Finally there are empirical tests on overall sample of Chinese258cities and regional samples of Eastern, Western and central regions. Results show that the agglomeration effect on average is about6%-9%, and the promoting effect of infrastructure on productivity is significant. At the same time, the interaction of the infrastructure and employment density is positive, which shows infrastructure can enhance the impact of industrial agglomeration on productivity with its externality.

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