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| A REVIEW OF INDUSTRIAL AGGLOMERATION: MODELS AND PROPOSITIONS OF THE NEW ECONOMIC GEOGRAPHY |
| ZHANG Cui1, ZHAO Wei2 |
1. School of Economics, Jinan University, Guangzhou 510632, China;
2. School of Economics, Zhejiang University, Huangzhou 310027, China |
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Abstract Economic activities are unevenly distributed at different levels, such as cities and provinces. And industrial agglomeration is also an important topic for the recent academic research. This paper provides a systemic evaluation of this topic from both the theoretical level and the empirical level based on the literature review. Theoretically, the New Economic Geography (NEG) is the main theory in explaining the industrial agglomeration. With core-periphery model, many researchers such as Venables, Martin,Rogers, Puga, Baldwin bring some new factors to analyze their effects on the industrial agglomeration. Empirically, this paper summarizes the present indexes of industrial agglomeration. And then, it categorizes the empirical checking into five propositions and reviews them in turn. The first proposition is the market potential and industrial agglomeration, which means economic activities tend to concentrate in the bigger market. The second proposition is the home market effect (HME) and industrial agglomeration. The third proposition is the knowledge spillover, intermediate goods production and industrial agglomeration, which mainly analyzes the effect of knowledge spillover and intermediate goods production on the industrial agglomeration. The forth proposition is to compare the New Economic Geography, the new classical trade theory and the new trade theory. The fifth proposition is the domestic transportation cost and industrial agglomeration, which is to testify the main conclusion of the core-periphery model. However, the foregone studies seldom pay attention to the impact of the international opening up on the manufacturing agglomeration. In fact, with the development of the international trade among countries, many scholars have noticed that industrial agglomeration has changed within a country after this country opens up. Therefore, the relationship between the international opening up and the manufacturing agglomeration is a new extension of the New Economic Geography.
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Received: 14 December 2010
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2011, Vol. 26 
