Clusters, Co-agglomeration, and Urbanization: based on Chinese city data analysis

Abstract

There is much controversy on the effects of spillovers of specialized industry agglomeration and diversified industry agglomeration on the promotion of urban development. However, the degree of industry agglomeration in Chinese cities is generally between complete diversification and specialization. In the case of multi-industry co-agglomeration, the local government provides subsidies for advantageous industrial clusters in order to increase the rate of urbanization. Compared to the rest of industries, the same type of industry responds stronger to the increase in the number of migrated labor force with respect to the degree of spillovers. This phenomenon leads to the further intensification of industries with fast growth of productivity. Finally, there may emerges “dual conflict” between the Nash Equilibrium states in the city and the optimal-utility-oriented employment structure of the whole society. Even if the balanced city size formed by the free population mobility is worthy in-depth discussion. For the first time, this paper attempted to conduct a discussion and empirical analysis on the matching between migrated labor forces and the urban industries. The research findings verify that the expansion rate of Chinese city size rests on co-agglomeration to a large degree.