Public Coordination and Institution Innovation: An Institutional Approach for Hub-and-Spokes Logistics Network in the Greater Bay Area

Abstract

For several years, the Greater Pearl River Delta (GPRD) has been stagnated under lesser efficient subregional integration proceedings. These cities have been existing economic interdependency which regarding to different economic structures and characteristics. In addition to administrative institution, there are a big difference between Chinese central government and two special administrative regions under the One Country Two Systems. Scholars raise doubts the public coordination and performance and its conjecture, which ties in precisely with the issues of multi-level governance, is based on an empirical study conducted in 9+2 cities n GPRD, which set out to characterize the workings of these territorial innovation systems and to propose a policy strategy are necessary. However, the newly introduction of the Greater Bay Area (GBA) to the GPRD, but the institutional barriers are remaining and need a driver to trigger the innovation for this regional development. This study applies the hub-and-spoke system and private-public agent (PPA) model to utilize the institutional model. Moreover, this study identifies that the integration of logistics in PRD need to be revised after added sense and variation into the new revised gravity model is a better consideration. Meanwhile, this article highlights the hub-and-spoke logistics network, policy-driven on institution designs, market-driven on supply chain management, and the institutional innovation. The intra-competition among GBA cities could be eliminated by an integrating hub, as we suggested in this article. Both the essence of the institution or market efficiency, the hub-and-spoke system and PPA model are considerable into GBA development planning regarding its inter-government approach and the liberalized economy at all, whether the problems on tradeoff and distribution are relying on the effective operation of PPA model which undergoing a well-organized institution.