Industrial policy, agglomeration economy and heterogeneous firms’ mode of trade upgrade

【Author】

SHEN Hong;GU Naihua

【Institution】

Institute of Industrial Economics, Jinan University;Institute of Industrial Economics, Jinan University

【Abstract】

The processing trade dominated by foreign-funded enterprises is an important component of the flourishing development of China’s foreign trade exports. This article focuses on the impact of industrial agglomeration led by government’s industrial policies on trade patterns of exports under the gradual opening strategy. Measuring industrial agglomeration through various indicators from different levels, the empirical research of this article is based on large sample data of manufacturing exporters and finds that agglomeration does not promote exporters to transfer form processing trade to ordinary trade through positive spillover effect. It argued that processing exporters lack the motivation of upgrading along the value train due to over-agglomeration caused by industrial and transnational corporations’ global production strategy. To improve the competence and sustainability of Chinese export, the government needs to alleviate dependence on foreign investment and the excessive interference with industrial policy and facilitate suitable environment and market-led agglomeration conditions for the domestic enterprises to participate in international competition?.??

【Keywords】

industrial policy;industrial agglomeration;heterogeneous firms;trade method upgrade

References

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Springer Journals Database

Total: 32 articles

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