New Economic Geography Theory Research Articles

FORMATION AND EVOLUTION OF THE THEORY OF REGIONAL ECONOMICS IN CHINA

FORMATION AND EVOLUTION OF THE THEORY OF REGIONAL ECONOMICS IN CHINA

Spatial spillover effects of manufacturing agglomeration on China's total factor carbon productivity: evidence from the regulatory role of fiscal decentralization.

Based on the theory of new economic geography, this paper used panel data from 284 cities in China from 2006 to 2019 to determine the effects of spatial spillover and heterogeneity of manufacturing agglomeration (MA) on urban total factor carbon productivity (TFCP) and the regulatory effect of fiscal decentralization on the outcome. The results showed that (1) MA shifted from the eastern region of China to the central and western regions, with the center of gravity moving towards the south. The spatial pattern of urban TFCP displayed the solidifying characteristics of "low-level agglomeration and high-level dispersion," with technological progress being the primary driver. (2) The MA had a significant U-shaped effect on the TFCP of local and nearby cities, promoting the improvement of urban TFCP through Jacobs' and Porter's externalities but not MAR externalities. (3) Regarding regional differences, MA had a significant U-shaped impact on urban TFCP in the eastern and central regions. At different levels of manufacturing development, there was an inverted U-shaped relationship in both manufacturing and non-manufacturing metropolitan areas. For varying degrees of manufacturing industry agglomeration, increasing the level of MA improved urban TFCP in low agglomeration areas, but inhibited it in high agglomeration areas. (4) The implementation of fiscal decentralization nationwide and in the eastern and central regions significantly weakened the impact of MA on TFCP. Furthermore, fiscal decentralization significantly enhanced the influence of MA on TFCP in cities exhibiting high levels of economic development, advanced industrial structure and strict environmental regulations. Therefore, based on the unique developmental characteristics of the manufacturing industry in various cities, fiscal policies ought to be tailored to local circumstances to support key areas. This strategy should facilitate the high-quality development of manufacturing industry and low-carbon development of cities.

Does the development zone promote population urbanization? Evidence from China

As the main space carriers of industrial agglomeration and land development, the development zones’ (DZs’) ability to absorb the population is crucial to the coordination of land urbanization and population urbanization. Based on the theory of New Economic Geography, this study uses China’s fifth and sixth census data to empirically analyze the impact and mechanism of DZs on population urbanization by comprehensively utilizing propensity score matching, difference-in-difference model and mediating effect model. Results show that the establishment of DZs can promote the population urbanization. When the dominant industries planned by the DZs are in line with the local comparative advantage, the intensity of population urbanization affected by the DZs will enhance. The “policy rents” provided by the DZs attract firms to gather, which in turn creates additional jobs by attracting new firms and expanding the scale of incumbent firms, attracting additional population inflow. From another perspective, the establishment of DZs improves labor’s wages and welfare, promotes the stable living of labor nearby, which boost population urbanization. In addition, the expansion of land supply is also a channel for the DZ to promote population urbanization.

ПРИГРАНИЧНЫЕ РЕГИОНЫ В УСЛОВИЯХ ИНТЕГРАЦИИ: ТЕОРЕТИЧЕСКИЕ ОЦЕНКИ И ПРАКТИЧЕСКИЕ РЕЗУЛЬТАТЫ

The study of the dynamics of interstate interactions during globalization and regionalization of the world economy enabled to accumulate a significant amount of theoretical and empirical results, which can be used to assess the impact of cross-border trade cooperation on regional economic development. A particular interest is using different approaches and methods for the analysis of the development of border regions in the context of integration. The author compares the dynamics of some border regions of the Union State of Russia and Belarus, the EU and a number of other states involved in the integration processes. He attempts to summarize the most significant conclusions of Russian and foreign scholars studying the impact of interstate integration on the socio-economic situation of border regions. He notes that certain opportunities for assessing the impact of a region’s border position on its development are provided by the new theory of trade and new economic geography. The study has shown that the impact of integration on the development of border regions differs a lot. It depends on various goals and motives behind the convergence of independent states, as well as on unique institutional factors of border areas.

The Modern Gambit in the Eurasian Version of the “Great Game”

On the fields of the “Great Game” another party of confrontation between the two main world civilizations — maritime and continental, the successors and followers of the Anglo-Saxons (USA) against the Eurasian continental power (Russia) is unfolding. This is not the first batch and, alas, not the last. The confrontation originates from the struggle for control over the Mediterranean Sea in the distant 18th century between Russia and the British Empire, which started the “Great Game” with the Maltese party in September 1800. UK-British Empire-then USA vs. Russia-Russian Empire-Soviet Union-Russian Federation. In total more than 220 years. The game continues.Aim. The aim of the study is to solve the scientific problem of determining the national interests of Russia in the modern version of the “Great Game”.Tasks. To achieve the goal of the study, the following tasks are solved: to identify the geopolitical and economic components of Russia’s national interests within the regional space of the modern version of the confrontation and to determine the possibilities for realizing these interests.Methods. This paper uses the methodological tools of spatial economics and the theory of new economic geography, which makes it possible to combine geopolitical and economic (geo-economic) imperatives in a localized space when coordinating joint activities. The action takes place in the southwestern borderlands of Russia and covers the waters and lands of the Azov basin and the Northern Black Sea region, as a “prefield” to ensure Russia’s maritime access to world markets via the southern route.Conclusions. The conclusions of the study are that essentially two strategic tasks are being solved in this region — establishing control over communications and energy resources on the basis of coordinating Russia’s military and economic activities in the waters and on the coast of the Azov and Black Seas in order to ensure the “connectivity” of the country’s territory with southwest. Initially, the conflict was based on the struggle for control over energy resources and, first of all, natural gas and communications for the delivery of the latter to the West, which seems to be very problematic in modern conditions. However, this is the reason for the continuation of the “Great Game”.

Evaluating resource utilization efficiency in urban land construction of Yangtze river economic zone under technological progress

Based on the economic models of DEA-Malmquist, this paper estimated the land utilization efficiency by considering dimensions such as energy, water and economic inputs in the Yangtze River Delta urban agglomeration from 2004 to 2016, and analyzed its spatial and temporal evolution pattern and characteristics. Then use the Tobit model to explore the main influencing factors, and examine the contribution of each influencing factor, such as technical progress. The research results show that the urban construction efficiency and the distance from the port have a “∽” curve relationship, verifying the “center-periphery” theory of new economic geography. It is also found that the effective radiation distance of the current economic center Shanghai to the surrounding area is 361.5 km. The structural analysis of the efficiency of construction land shows that the market mechanism has not played a fundamental role in the allocation of construction land resources, the improvement of the quality of labor force, and the expansion of capital clustering with industry is the main driving factor to support the efficiency of construction land use in the Yangtze River Delta region. We suggest that more efforts will be needed to reform market mechanisms and improve technological progress in the near future.

Coordination of Economic and Defense Activities in the Pacific Region

Europe — Eurasia — Asia. Each continent of the vast continent corresponds to a dominant continental power, respectively Germany — Russia — China; in one of them (China), in the zone of conjugation of the Eurasian and Asian continental civilizations, that is, in the Russian-Chinese borderland, a new regional entity is emerging and developing with the attributes of a maritime civilization.Aim. The aim of the study is to solve the scientific problem of matching the national interests of the two countries within this regional maritime space.Tasks. To achieve the goal of the study, the following tasks are being solved: to substantiate the structure of the allocated geopolitical entity and to identify the directions of interaction between the two countries on the basis of coordinating economic and defense activities in the Pacific region.Methods. In this work, the methodological tools of spatial economics and the theory of new economic geography are used, which make it possible to combine geopolitical and economic (geoeconomic) imperatives in a localized space when coordinating joint activities. The core of this formation is the three seas of the Pacific basin adjacent to the territory of China. However, China’s strategic interests extend further, to the north, into the water area of at least two Russian seas. Thus, Russia is also involved in joint maritime activities within the Pacific region.Results. As a result, this creates a space of common national interests, which covers the waters of the five seas and adjacent territories. The regional core of this formation tends to expand, north, east and south, and further west, into the Indian Ocean.Conclusion. The conclusions of the study are that the maritime (more precisely, naval) activities of the two continental powers are essentially becoming the basis of cooperation and cooperation between Russia and China, since Russia can contribute to the implementation of China’s vast national interests only in the defense sphere, providing, in addition, significant, political support for China. As for economic activity, first of all, while meeting the growing demand of the Chinese economy for energy resources (oil, gas and coal), the prospects in this direction lie outside the current planning horizons (until 2035) when implementing large Arctic gas projects. in the water area of the Gulf of Ob “Arctic LNG 1, 2, 3”.

РАЗВИТИЕ МОНОПРОФИЛЬНЫХ РЕГИОНОВ ЭКОНОМИЧЕСКОГО ПРОСТРАНСТВА РОССИИ: СРАВНИТЕЛЬНЫЙ АНАЛИЗ

The article is devoted to the analysis of the directions of the economy structure development of single-industry regions, the specific features of the “industrial transition” with a focus on strengthening sectoral diversity, which is typical for all countries of the world. The purpose of the study has been to substantiate the existing development tracks in relation to the position of the core industry and changes in the level of manufacturability of the activities of the region's space. The study has been carried out on the example of four regions of the Russian Federation specializing in the metallurgical industry (Lipetsk, Vologda, Chelyabinsk regions, and Krasnoyarsk Territory). The methodology of the work is based on the theory of new economic geography and the uniqueness of the territorial economy even of regions similar in terms of single industry. Modern methods, coefficient and correlation analysis have been used to compare the types of activities by the Russian National Classifier of Economic Activities and the principles of grouping branches of the Eurostat from the standpoint of the manufacturability of sectors. As a result of assessing the structure of the regional economy and cross-interactions between industries, alternative options for the development of metallurgical regions have been substantiated from the standpoint of the role of a single industry and the activity of sectors of different levels of manufacturability. An increase in the presence of industries not assessed by the level of manufacturability (Lipetsk Region and Krasnoyarsk Territory) and strengthening in the regions of medium-high manufacturability activities (Vologda and Chelyabinsk regions) have been revealed. It is concluded that cross-interaction between medium-low and medium-high industries is activated in regions with intra-industry diversification (both within the metallurgical and machine-building industries, as in the Chelyabinsk Region). The practical significance of the findings lies in the development of an analytical platform for the formation of a strategy for the development of basic sectors of the economy and monitoring its implementation.

Effects of financial agglomeration on green total factor productivity in Chinese cities: Insights from an empirical spatial Durbin model

Green Total Factor Productivity (GTFP) is a critical indicator for measuring the development and transformation of green economy, with profound implication for achieving a win-win situation of conserving energy, reducing emissions, and developing economy. The promotion of GTFP cannot be separated from the financial support and guarantee provided by financial agglomeration. According to the theory of new economic geography and agglomeration, this study uses location entropy and directional SBM-DEA methods to calculate the financial agglomeration level and GTFP of 283 cities at prefecture-level and above in China from 2003 to 2018. A temporal and individual two-way fixed-effect model and a spatial measurement model are constructed to empirically study direct and spillover impacts of financial agglomeration on GTFP. The empirical results show that financial agglomeration facilitates GTFP growth in a given city, but it significantly reduces GTFP in surrounding areas of the city. Divided the cities by their geolocations in eastern, central, and western regions, we find that, in each region, financial agglomeration can significantly promote GTFP of a city but does not have a significant impact on its surrounding areas, indicating a weak spillover effect. Cities with a population of less than 3 million are associated with higher GTFP. Industrial structure, foreign direct investment and human capital play a positive role in GTFP growth, but the role of urban infrastructure construction appears trivial.

Managing the spatial development of the Russian economy: Goals and tools

The article substantiates the modern interpretation of spatial regulation of the economy. It determines the priorities and practical tools for managing spatial development, including the task of overcoming economic differentiation of Russian regions. The paper reveals the distinguishing features of spatial regulation policy in the context of the transition to the system of strategic planning. The theoretical and methodological basis of the study embraces the growth poles theory, the theory of new economic geography and the theoretical provisions of the Russian school of productive forces distribution, which made it possible to integrate the ideas of planned development of territories and market mechanisms of spatial self-regulation. Among the main research methods are economic-legal analysis and generalization. The system of regional development indicators constitutes the empirical basis of the study. The research results contain recommendations to clarify the provisions of the Spatial Development Strategy of the Russian Federation. In particular, the assessment of the economic differentiation of Russian regions, as well as its target values for the future should be added to the Strategy. We suggest classifying the types of federal constituent territories as objects of the state policy on regional development based on their economic characteristics. Moreover, it is expedient to overcome the current duality in the interpretation of the meso-level of strategic planning, and to design a state program for supporting towns through identification of specific needs of each type of settlement. The study also proposes to harmonize the legislation on strategic planning and on the fundamentals of the state policy on regional development with respect to priorities of economic equalization of regions, the emphasis on the federation subjects’ self-development, etc.

The persistence of apartheid regional wage disparities in South Africa

Abstract In this article, we use a new economic geography (NEG) model to estimate the extent to which the persistence in apartheid regional wage disparities in South Africa is an outcome of economic forces such as market access. We estimate a structural wage equation derived directly from the NEG theory for 354 regions over the period 1996 to 2011. We find support for an augmented NEG model in explaining regional wage disparities across regions in South Africa, although the market access effects are highly localised in view of high distance coefficients. We also find, even after controlling for NEG and other region-specific characteristics, a persistent wage deficit in the former homelands, where under apartheid black South Africans were forcefully relocated according to their ethnic groups. Average wages of workers in homelands remained approximately 17% lower than predicted between 1996 and 2011, despite the reintegration of these regions into South Africa and the implementation of regional policies after the end of apartheid.

Research on the Spatial Distribution Pattern and Influencing Factors of Digital Economy Development in China

The spatial heterogeneity of the influences of various driving factors on the digital economy restricts the further development of regional coordination. This paper constructs an index system for measuring the development level of the digital economy from the three dimensions of infrastructure construction, digital application and digital industry development. Using the entropy method to measure the development level of the digital economy in each region in 2018 and based on the theory of economic growth and new economic geography, a theoretical model of the influences of input factors, technological progress and institutional changes on China’s digital economy is established. Combined with Exploratory Spatial Data Analysis (ESDA) and Geographically Weighted Regression (GWR) model analysis, the spatial distribution pattern of China’s digital economy and its influencing factors are discussed. The results show that there is a large gap in the development level of the digital economy in the eight comprehensive economic regions, and the development level of the digital economy presents a significant spatial correlation in space. The driving patterns of input factors, technological progress and institutional changes to the spatial distribution of the digital economy show obvious spatial differentiation. This study provides important referential value for promoting the coordinated development of the regional digital economy.

НАУЧНЫЕ ОСНОВАНИЯ ПРОСТРАНСТВЕННОЙ ЭКОНОМИКИ И ТЕОРИИ НОВОЙ ЭКОНОМИЧЕСКОЙ ГЕОГРАФИИ

The modern political and economic processes have had a significant impact on the change in the economic policy of Russia and its “internal” economic space. As a result of the “sanction” blocking of the significant sectors of the economy, the importance of considering the spatial factor of socio-economic development in the basic development program documents has increased. The article examines the main approaches to spatial organization of the regional economy and strategic directions of spatial development in the context of the “Strategy of Spatial Development of the Russian Federation for the Period up to 2025”. These approaches are based on the joint evolution of this organization and the regional settlement system under the influence of a multiple external and internal factors, including the implementation of a rational state policy of regional development. The study examines the main provisions of the spatial economy as an independent scientific field and the theory of new economic geography. It shows the methodological similarity between these two scientific disciplines. The article shows that the basis of spatial development is the integration of specific forms of spatial organization of the economy into large and / or largest agglomerations. The leading role in this integration belongs to the regional communications system, which unites economic centers localized in an allocated space into an integral system and ensures the economic space unity. The implementation of the spatial economy provisions is studied on the example of the Northern Sea Route as a regional communications system, which is in fact the center of the “assembly” of the Arctic space. The functional dominant of the agglomeration as a form of spatial organization of the regional economy is creating such high-quality life conditions that are optimized with the rational economic development of the regional space while maintaining the economic situation at an acceptable level. These are the conditions that form communicative ties, which are the framework for uniting various elements of the regional space.

Will manufacturing investors go to border zones? The case of central Thailand

PurposeThe purpose of this paper is to examine effects of regional economic integration on the concentration of manufacturing firms in provinces of Thailand on the border with Cambodia. It aims to clarify the interactions between dispersion and agglomeration forces within a firm’s location choice in the presence of economic integration and thereby to explain the feasibility of the border SEZs.Design/methodology/approachThe theory of industrial clustering and New Economic Geography provides a theoretical framework to understand the locations of economic activities when regional economies are integrated. This paper employs provincial level data to calculate industry location quotients across a 10-year period from 2007 to 2017 in central Thailand and uses firm-level data from industrial censuses in 2006 and 2011 to estimate logit models for two border provinces with Cambodia and three eastern seaboard provinces. Two base models and extended models are tested to explain the persistent agglomeration of Thai firms in each manufacturing industry.FindingsThe authors found a positive correlation between the agglomeration level in 2006 and the choice of firms toward the border provinces in 2011. The disaggregated analysis shows that depending on the initial level of concentration in each industry, there can be agglomeration or dispersion effects. The advantage of low trade costs and labor costs of unskilled migrant workers are not significant factors attracting firms to the border. Firms in industries with increasing returns are more likely to stay in the hub.Practical implicationsThe disaggregated analysis by industry provides very important implications for SEZ policy interventions. The important role of agglomeration economies limits the extent to which such policies can be successful. It would be an enormous challenge for policy makers to initiate forces which are strong enough to induce firms to relocate away from areas with high agglomerations. Policy interventions with attractive incentives should be very selective to industries already have a certain degree of concentration in the provinces so as to reinforce the agglomeration effects.Originality/valueThe research extends the empirical literature on SEZs by offering a unique case study of an emerging economy with a strong market foundation rather than a transitional or developed economy. It is also different from other research on SEZs when taking into account the effects of regional integration on border SEZ formation and firms’ location choices. In addition, this study employs firm-level data rather than provincial data to bring empirical insights and fill in the knowledge gap on agglomeration economies in Thailand with the presence of regional economic integration.

Increasing returns to scale, productivity and economic growth – a spatial analysis of the contemporary EU economy

This paper is an attempt to explain variations across 261 regions of 27 EU countries in productivity growth for 2000-2013. The study is based on Fingleton’s model which analyses the spatial process of productivity growth based on some elements of the theory of New Economic Geography and Endogenous Growth Theory. The applied specification links the productivity growth to the growth of output by means of Verdoorn’s law. The model has been tested using the Spatial Panel Durbin Model with Multiple-Level Spatial Fixed Effects. Our findings suggest that increasing returns to scale are present in the EU economy. Moreover, the effect of increasing returns to scale is considerably stronger than has been suggested by both classic and recent research papers. Furthermore, we also find that there are evident spatial clusters of spatial productivity in the EU

A Geographical Analysis of the Poverty Causes in China’s Contiguous Destitute Areas

One of the most critical development problems in China is the existence of a considerable number of contiguous destitute areas (also known as regional poverty), and the causes behind such regional poverty might structurally differ by geographical characteristics. To deal with the problem, this paper, based on the “Three Nature” theory of New Economic Geography, first establishes an analytical index system of poverty causes, and then uses the gray relational method to identify the causes of poverty in 14 contiguous destitute areas. The results show that, at present, the main poverty causes in the mountain areas in eastern part of China, such as the Dabie mountain area, the Yanshan-Taihang mountain area and the southern Greater Khingan mountain area, are the shortage of human capital and information technology. In contrast, the main factors behind regional poverty in the central mountain areas such as the LuoXiao mountain area, the Lvliang mountain area and the Wuling mountain area are poor transport, locational and other natural factors. The western mountain regions such as Tibet, Tibetan areas in four provinces, South Xinjiang’s three districts and the West Yunnan border area are especially affected by natural endowments, but each area’s specific cause for poverty is different from one another. Finally, this paper discusses relevant policy issues regarding the fact that poverty causes are different by distinct natural factors.

Testing the new economic geography’s wage equation: a case study of Japan using a spatial panel model

This paper estimates the parameters of the wage equation of the new economic geography (NEG) using a newly developed spatial panel model. The results show that wage rate variation across different prefectures in Japan can be explained by market potential, which is a key variable in NEG theory, while controlling for variation in labour efficiency. Spatial heterogeneity is particularly important in the context of Japan in part because of its complex physical geography and the spatial distribution of its principal urban centres. The paper considers the challenges associated with representing the spatial relationships between prefectures describing and implementing different approaches to measuring transport costs.

New Economic Geography as the Theoretical Platform of Region Innovative Development

The article shows the evolution of the policy of innovative development of the regional economy in recent decades. Particular attention is paid to industrial and technological component of the theory of New economic geography and justification of the growing role of institutional factors in the innovative development of the regions. Based on the analysis of the main ideas of the theory of Nobel laureate Paul Krugman, the author identifies the base institutional factors of competitiveness policy of the regional economy in the 21st century. The directions of this policy in the technology developed countries are: support of cooperation system of all levels and subsystems of national innovative system; strengthening of institutes of innovative economy, including support of the competition and improvement of intellectual property protection system, partnership of the government, the regional authorities and a business sector in implementation of innovative programs and projects. DOI: 10.5901/mjss.2015.v6n3s5p19

An Empirical Study Of Productivity Growth In EU28 - Spatial Panel Analysis

This paper investigates the spatial process of productivity growth in the European Union on the foundations of the theory of New Economic Geography. The proposed model is based on the study of NUTS 2 regions and takes into consideration a spatial weights matrix in order to better describe the structure of spatial dependence between EU regions. Furthermore, our paper attempts to investigate the applicability of some new approaches to spatial modelling including parameterization of the spatial weights matrix. Our study presents an application of the spatial panel model with fixed effects to Fingleton’s theoretical framework. We suggest that the applied approach constitutes an innovation to spatial econometric studies providing additional information hence, a deeper analysis of the investigated problem.

Chinese manufacturing on the move: Factor supply or market access?

This paper examines recent trends in the location of manufacturing activities in China using a model that combines forces relating to Heckscher–Ohlin (H-O) and New Economic Geography (NEG). It is found that there are large intercity shifts in industrial employment since 1998 in China, with the overall redistribution being towards coastal cities. Our investigation of the determinants of locational change in Chinese industries suggests that market access based on NEG theories played a key role in industrial location especially in the post-WTO period, while there is evidence of H-O arguments associated with factor supply in previous years.